Ezra Klein: How does the individual mandate work?

[usregimechange]

So long as legal challenges to the individual mandate are in the news, we might as well be clear about what the mandate is, and how it works.

The individual mandate is a requirement that all individuals who can afford health-care insurance purchase some minimally comprehensive policy. For the purposes of the law, "individuals who can afford health-care insurance" is defined as people for whom the minimum policy will not cost more than 8 percent of their monthly income, and who make more than the poverty line. So if coverage would cost more than 8 percent of your monthly income, or you're making very little, you're not on the hook to buy insurance (and, because of other provisions in the law, you're getting subsidies that make insurance virtually costless anyway).

Most people will never notice the mandate, as they get insurance through their employer and that's good enough for the government. But of those who aren't exempt and aren't insured, the choice will be this: Purchase insurance or pay a small fine. In 2016, the first year the fine is fully in place, it will be $695 a year or 2.5 percent of income, whichever is higher. That makes the mandate progressive.

And what happens if you don't buy insurance and you don't pay the penalty? Well, not much. The law specifically says that no criminal action or liens can be imposed on people who don't pay the fine. If this actually leads to a world in which large numbers of people don't buy insurance and tell the IRS to stuff it, you could see that change. But for now, the penalties are low and the enforcement is non-existent.

http://voices.washingtonpost.com/ezra-klein/2010/03/how_does_the_individual_mandat.html

[bluestateguy]

1. Kind of like countries that have mandatory voting

I am told that in Australia there is a very small fine for not voting, which is mandatory. But the government is not very vigilant about collecting the fines, many of which go unpaid.

[DJ13]

2. No criminal actions or liens

But that doesnt preclude garnishments on tax refunds or wages, does it?

[Donnachaidh]

3. ding ding ding. n/t

[lumberjack_jeff]

12. A garnishment isn't a lien? n/t

[FarLeftFist]

4. So consider it a tax raise that helps the well-being of millions of Americans

[stray cat]

5. accept that you have everyone else pay your share by not paying it yourself

just like now actually

[kickysnana]

6. K&R

[Toots]

7. Not much of a Mandate if there is nothing going to happen to you if you refuse.

:shrug:

[raccoon]

8. That hasn't been my experience!

"Most people will never notice the mandate, as they get insurance through their employer "

IME, LOTS of people I know don't have insurance through their employer.

[Bluenorthwest]

9. The IRS will take the fine right out of your tax refund or accounts

So Ezra is simply incorrect. In addition, laws that with 'non existent enforcement-for now' are the very laws that wind up being selectively enforced and that is a whole can of worms as well. And we all know that money the IRS is legally allowed to take, it will take.

[area51]

10. +1

I'll put it more baldly: Ezra is lying through his teeth. Since this administration claims that they want people to have access to health care, why fine people and still leave them without access to care. This was a giveaway to the insurance companies with extremely little oversight. Then, as now, they are basically unregulated and will continue to kill Americans by denying claims. Americans don't need for-profit, private insurance, they need actual health care. This country isn't civilized, not by a long shot.

[Lydia Leftcoast]

11. I actually dropped my insurance a couple of days ago, partly because it was

one of those useless policies that will be required by the mandate (high deductible, partial coverage above the deductible), partly as a form of civil disobedience.

I did the math and realized that paying those premiums (which are withdrawn from my bank account on the same date every month--whether I can afford them with my variable income or not) was actually preventing me from paying the non-covered bills that I incurred for actual CARE.

More math convinced me that I could just as easily go bankrupt paying what I still owe from the last six months of slow business plus insurance premiums as I could from extraordinary medical bills.

If I'm to go bankrupt, I want it to be for something BIG, not because I've been nibbled to death. Not having the premiums to pay will free up more cash for paying off bills and back taxes.

Eight percent of one's income? That doesn't account for

1. Extremely variable incomes, such as most free-lancers have.

2. Individual expenses: A family hit with the legally allowed tripled premiums for people over fifty may be at precisely the point where they're putting their kids through school or spending a lot of money caring for elderly parents or they may be downsized and the calculations don't "catch up" with their loss of income

Note that if either my current insurance or the options under the mandate paid for 100% of care or had only small copays required, I'd keep it.

But I've spent six years paying one of those allegedly "good" "non-profit" companies tons of money for NOTHING, due to the high deductible.

[Warren Stupidity]

13. " useless policies that will be required by the mandate"

Perhaps I missed the part of the legislation that requires you to purchase a 'useless' "high deductible, partial coverage above the deductible" policy. Could you please provide a pointer to that requirement?

[Lydia Leftcoast]

14. The list of the types of policies to be offered in the exchanges:

bronze, the only one affordable to someone who is charged triple premiums, covers only 60% of expenses.

If Obama had insisted on policies like the ones they have in CIVILIZED countries with no deductibles and premiums by income instead of age, I would have been delighted.