The Individual Mandate And Health Insurance
- Written by I. Mandate I. Mandate
Uncle Sam Wants YOU...to have health insurance!
Health insurance is the key to the kingdom for healthcare access and payment in America. The primary forms of healthcare coverage is employer group and individual health plans or government coverage via Medicare and Medicaid. The individual mandate requires the personal responsibility to have health insurance. The idea is to eliminate freeloaders and scammers from gaming the new, all inclusive medical insurance system. The Obamacare individual mandate is what makes it possible to make the following reforms towards achieving universal healthcare. Insurance carriers will be required to insure all comers regardless of pre-existing conditions or medical history, with guaranteed-issue and community ratings. The Affordable Care Act imposes many other consumer friendly and protective regulations on the health insurance industry such as elimination of annual and life-time coverage caps, new competitive marketplace insurance exchanges, essential health benefits requirements and the medical loss-ratio, to name a few major ones. Such titanic insurance industry changes will be softened or offset by the tens of millions of new customers they will have vying for their health plans, hopefully a good tradeoff and win for everyone.
Obamacare Qualified Health Insurance
The qualified health insurance requirement is defined as the minimum health plan coverage allowable. This health plan, while meeting the essential health benefits requirements, will be equal to the lowest-end health plan in the state insurance exchanges the bronze plan, it will cover 60 percent of medical cost with insured picking up the difference till reaching a annual maximum out-of-pocket expense capped at around $6,000 for individuals and $12,000 for family plans in 2012 (tied to a cost of living index). The silver, gold & platinum health plans will be a trade off of higher premium cost for more generous benefit coverage as additional options, from the bronze plan on the insurance exchanges. "Young Invincibles" - people between ages 18-29 years old will have additional lower cost health plan options. Folks with employer group coverage or with other qualifying insurance gotten outside the exchanges will be in compliance with the individual mandate. Starting 2014 most Americans & legal residents will be required to have qualified health insurance.
Health Insurance Exchange Marketplace
The state health insurance exchanges will be the central Obamacare Marketplace and administrator of the Patient Protection and Affordable Care Act. Including subsidies for premiums that will be available to individuals and families with income between 133-400 percent of the federal poverty level, Subsidies will be set on a income based sliding scale formula in the form of affordability tax credits. Medicaid will be available to U.S. citizens with income below 138 percent of poverty in the state insurance exchanges if their state participates with the Medicaid expansion - seeing the Feds pick up 100 percent of the cost in the first 3 years and 90 percent thereafter I cannot imagine a reason why a state would opt out to afford the most vulnerable folks this coverage option. I believe healthcare providers and hospitals will push their states, insisting on participation. If not, providers will be treating them in the old dysfunctional sick care, using emergency centers, like pre-health reform with no compensation other than charging more to everybody else to make up for their loss, there is no free lunch.
The Individual Mandate Penalty
The individual mandate requires compliance or pay a penalty that is specified in the law starting in 2014, the IRS will enforce and collect the penalties through the annual income tax filing.
The individual mandate penalty tax assessment is as follows: you will pay the greater of the two of a flat fee or percentage of income. Years 2014, $95 or 1% of income, 2015, $325 or 2% of income, 2016 (full implementation), $695 or 2.5% of income. Children count as half an adult, families maximum penalty is the greater of three times an adults or the 2.5% of income. All penalties are capped at the lowest cost (bronze) plan on your state's health insurance exchange and after 2016 the flat fee penalties will tied to a cost of living index. There are a number exemptions including but not limited to hardship, religion, Native Americans, veterans coverage, to the incarcerated prison population.
The US Treasury released the Final Rules for the individual shared responsibility for health insurance coverage. The final rule clarifies and details the regulations, exemptions and requirements of the individual mandate.
The Individual Mandate And You
The individual mandate requirement will be a consideration for all Americans beginning in 2014 when the major aspects of the Affordable Care Act takes effect. The Kaiser Family Foundation provides a detailed ACA requirement flowchart that is easy to follow to understand how the law will affect your specific situation. The flowchart allows you to adjust your personal circumstances to the nuances in the law requirements.