This is an occasional post covering healthcare systems in the US.
The debate over healthcare reform rages. A little over a year ago the Patient Protection and Affordable Care Act was signed into law by President Obama. Since then, much of the fight over implementing the new law has centered on the so-called “individual mandate” provision of the law. What is it? Why the debate? And how does it affect you? Class is in session.
What is the individual mandate?
The individual mandate states that starting in 2014 every American must have health insurance. If you currently do not have insurance, you will be required to purchase a minimal coverage plan or pay penalties. Think of this like the law requiring liability coverage if you operate a motor vehicle.
Individuals making up to 400% of the federal poverty level (currently the federal poverty level is $11,800 for individuals and $24,000 for a family of four) will receive monetary help to buy coverage. The less you make the more help you’ll receive.
So, what’s the point?
The idea for the individual mandate is to provide insurance companies with additional customers to offset the insurance rule changes the law set forth. These rule changes include: Insurance companies can no longer, not accept someone for pre-existing conditions, drop patients for getting sick, and set lifetime limits on benefits they will pay.
All those in favor say aye
Supporters say the only way insurance companies would agree to the new regulations would be to increase their risk pool. Meaning they needed more healthy paying customers to offset their increased losses from the new rules. Requiring all citizens to purchase insurance is intended to provide these new customers.
The primary argument against the individual mandate is the federal government cannot require citizens to buy a privately offered product or service. Opponents are worried if the federal government makes this requirement, it will open up a Pandora’s box of other requirements. This is the crux of the lawsuits contending the individual mandate is not constitutional.
(In the case of the auto insurance requirement, individuals can opt out of the law by simply not operating a car.)
As you can imagine, there are multiple other arguments regarding the overall scope of the law and how the individual mandate affects its stated goals. However, I believe the arguments listed above are an accurate reflection of the primary issues being contended.
How it affects you.
Theoretically, if you already have employer based insurance the individual mandate will not effect you. In fact, the new rules on insurance companies will help. Unfortunately, things rarely work out exactly according to theory. Over time, the total effect of the individual mandate is unclear.
If you don’t currently have insurance, the individual mandate will require you to purchase minimal coverage or face penalties.
I hope this post allowed you to at least have a better understanding of what all the arguing is about. (And it didn’t bore you too much.)