Tax Bill Removes ACA Individual Mandate - KTVN Channel 2 - Reno Tahoe Sparks News, Weather, Video

Tax Bill Removes ACA Individual Mandate

Posted: Updated:

The Tax Cuts and Jobs Act that passed Congress on Wednesday removes the tax penalty people face if they do not sign up for health insurance.

While the individual mandate is technically still in the Affordable Care Act, there's no mandate when there are no consequences.

"Losing the penalty payment, it basically is essentially removing the individual mandate, repealing that." Heather Korbulic, Executive Director for Silver State Health Insurance Exchange, says.

Currently, people have to pay either a fee of 695 dollars or 2.5 percent of their household income, whichever is higher. This provision of the tax bill does not take effect until 2019, so people who do not have health insurance in 2018 will still pay the fee.

While people who do not want to buy health insurance will be saving money, Korbulic is concerned that there will be fewer young and healthy people with insurance.

"We have to have a healthy, younger mix in our insurance market to keep the rates affordable for everybody" Korbulic says.

The removal of the mandate concerns Korbulic, because she says it's one of the few methods available to push healthy young people to buy insurance.

"The reason it was written into the Affordable Care Act was to insure that there was a younger, healthier risk mix, so young people had some incentive to get into the marketplace."

Basically, with fewer healthy people paying premiums, a higher percentage of people with insurance will file claims. That higher percentage forces higher premiums, especially for those who do not qualify for subsidies.

"People who are over 400 percent of the federal poverty level, they are going to be reaching the point where the premiums are such that they can't afford the marketplace anymore, and they'll be priced out." Korbulic says.

While premiums are set to rise if fewer healthy people buy insurance, insurance companies may also be forced to change if there's not enough healthy people with insurance.

"If we don't have a healthy risk mix, then that becomes a really expensive endeavor for an insurance company" Korbulic said. "And whether or not they want to continue to participate in a market like that is still to be determined"

Powered by Frankly
All content © Copyright 2000 - 2018 Sarkes Tarzian, Inc. All Rights Reserved. For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices.