The Individual Mandate-Nursing Paper Examples

The Individual Mandate

The Affordable Care Act provides the individual mandate which requires individuals to have a minimum essential coverage or face a tax penalty unless they are eligible for an exemption. Most employed Americans have health insurance through Medicare and Medicaid programs that their employer or federal government covers. In this case, they are not at risk of a penalty. More so, since the minimum essential coverage includes employer-sponsored and government-sponsored health insurance (Fiedler, 2020) (The Individual Mandate).

Before the provision, most enrollees were older and sicker than the general population. This resulted in high insurance premiums, which were expensive for most Americans. Also, before the ACA provision, most insurance providers denied applicants at increased risk of getting sick. In addition, charged sicker and older people higher premiums to protect themselves from having a disproportionate representation of insurance seekers.

Providers also did not cover mental health treatment, prescription drugs, and specific conditions. Hence, denying some people access to coverage completely (Eibner & Nowak, 2018). After the ACA came into effect, It remained a requirement for all insurers to give comprehensive insurance coverage to every applicant. Moreover, at premiums that do not change with health status or have restrictions for preexisting conditions.

Since 2014, the average penalty has changed significantly, from $210 in 2014 to $667 in 2016. By 2018, middle-income families earning around $60,000 faced a penalty of $2,085 (Towsend, 2022). The individual mandate is still in effect, but the penalty enforcement remained demolished in 2018. More so, as provided by the Tax Cut and Jobs Act of 2017 (Towsend, 2022). As a result, the individual mandate continues to exist without penalty (The Individual Mandate).

The individual mandate was included in the Affordable Care Act under the shared responsibility provision to enroll more healthy people or low-cost enrollees to get insurance to balance out the high-cost or the sicker group (Towsend, 2022). Some states, including Massachusetts, New Jersey, California, Rhode Island, and the District of Columbia, have their mandate and included penalties after the ACA ones were scrapped at the end of 2018.

State-level penalties remain assigned different amounts. These penalties ensure that health insurance costs are cheaper than paying penalties. For instance, the penalty in California is $800 for adults without insurance, $400 for children, and $2,400 for a family per year (Towsend, 2022). In Massachusetts, the penalty is based on income and family size for people above 18 years.

However, individuals below 150% of the federal poverty level do not pay the penalty while higher-earning families pay a higher penalty (Towsend, 2022). New Jersey has a similar penalty but it includes the average annual cost of Bronze plans to determine the penalty amount. Other states, like Rhode Island, require people to pay 2.5% of their annual household income, or $695 per person, and $347.50 per child (Towsend, 2022). Rhode Island rates are similar to those of Washington, D.C (The Individual Mandate).

The individual mandate penalties and how they affected health insurance coverage were controversial because data from the Congressional Budget Office shows that the individual mandate significantly increased insurance coverage, but Congressional Republicans and Trump’s administration believed the penalties had insignificant effects without providing any evidence (Fiedler, 2018).

The impact on those without coverage was financial because they would have to pay the penalty as per the federal and state provisions. The mandate reduced the insurance premiums, increasing accessibility to those not covered while encouraging more people to be insured. The mandate was repealed at the end of 2018 when penalties were reduced to zero.

Regarding whether the individual mandate influenced enrolment, Eibner and Nowak (2018) found that consumers responded to the mandate to avoid penalties, and their perspectives reveal that nonfinancial factors also played a part in increasing enrolment. Most people took insurance cover to comply with the law because they believed in penalty enforcement and decision-making inertia. According to Eibner and Nowak (2018), the repeal saw the enrolment fall by 2.8 million to 13 million people, and Bronze plan premiums increase by 3% to 13 percent, implying that the mandate effectively increased enrollment.

References

Eibner, C., & Nowak, S. (2018). The effect of eliminating the individual mandate penalty and the role of behavioral factors. The Commonwealth Fund.

Fiedler M. (2020). The ACA’s Individual Mandate In Retrospect: What Did It Do, And Where Do We Go From Here? Health affairs (Project Hope), 39(3), 429–435. https://doi.org/10.1377/hlthaff.2019.01433

Fiedler, M. (2018, May). How Did the ACA’s Individual Mandate Affect Insurance Coverage? Evidence from Coverage Decisions by Higher-Income People. USC. https://www.brookings.edu/wp-content/uploads/2018/05/coverageeffectsofmandate2018.pdf

Towsend, R. (2022, September 29). The Affordable Care Act Individual Mandate and Penalties. https://www.valuepenguin.com/aca-individual-mandate-and-penalties/