Senate And House Take Different Plans To Scrap Individual Mandate

The Affordable Care Act’s tax penalty for people who opt out of health insurance is one of the most loathed parts of the law, so it is no surprise that Republicans are keen to abolish it. But the penalty, called the individual mandate, plays a vital function: nudging healthy people into the insurance markets where their premiums help pay for the cost of care for the sick. That has required Republican lawmakers to come up with alternatives, which were included in the House bill that passed in May and updates to the Senate draft bill released Monday.

The GOP approach is called a “continuous coverage” or “creditable coverage” penalty. It would apply to people who buy insurance if they have gone 63 consecutive days without a policy during the past 12 months. In the Senate bill, they would have to wait six months before they could buy insurance. The bill that passed the House took a different tack: It did not include a waiting period but required insurers to increase premiums by 30 percent, and that surcharge would last for a year. While the ACA assesses a fine for each year people don’t buy insurance, the GOP plan would punish those who decide to purchase it after not being in the market. Full Article here.