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The Affordable Care Act’s individual mandate was repealed as part of Congress’ tax overhaul package, which was approved in December 2017. Now that President Donald Trump has signed it into law, the repeal could have an impact on the premiums you pay for your health insurance coverage.

What Is the Individual Mandate?

The Affordable Care Act (also known as “Obamacare”) originally included the individual mandate, a provision that required all Americans to have health insurance or pay a tax penalty. This mandate was recently repealed and will no longer be in effect beginning in 2019.

When Will the Repeal Take Effect?

The measure will go into effect in 2019. The penalty for not having health insurance will be enforced through 2018. Consumers who drop coverage before January 2019 will still have to pay the fine on their 2018 income tax returns. The penalty for not having insurance in 2018 is 2.5 percent of your yearly household income or $695, whichever is greater.

What Is the Impact of the Individual Mandate Repeal?

The mandate repeal has been estimated to reduce government spending by $300 billion over 10 years. It could increase the number of people with no health insurance by 13 million and raise premiums by 10 percent.

Experts fear that the repeal of the mandate could cause people to move from ACA plans to cheaper, short-term plans that come without essential health benefits or other consumer protections. This move could push younger, healthier people from the marketplace, driving up premiums.

Does This Repeal the Affordable Care Act?

No, the law itself is still in place and has not been repealed. The following components of the law are still in place:

  • Consumers can still purchase insurance coverage on state and federal marketplaces.
  • Medicaid expansion is maintained.
  • Government subsidies and consumer protections will still be issued.

All 10 essential health benefits—such as maternity care, prescription drugs, preventative care, and emergency services—will continue to be covered in all ACA plans.

Will States Enact State-Level Individual Mandates?

Maybe. Some states are beginning to create strategies to preserve the individual mandate that all Americans have health coverage or face a penalty. Here’s where some states currently stand:

State Current Action
California The chief executive of Covered California, the state’s ACA exchange, recently floated the idea of a mandate as one of several possibilities to help stabilize the state’s marketplace.
Connecticut Democratic officials considered the option during an early 2017 meeting with four state legislators.
Maryland On January 9, state lawmakers proposed a program that would impose a penalty on Maryland residents who don’t buy health insurance. That money would be used as a “down payment” for a plan on the state exchange.
Massachusetts Massachusetts is the only state that has an individual mandate already in place.
New Jersey On May 30, Governor Phil Murphy enacted a state individual mandate law that will go into effect January 1, 2019.
Vermont If the number of insured Vermont residents drops, Republican Governor Phil Scott’s administration will review a state individual mandate.
Washington Officials are exploring whether the state will implement an individual mandate.

To keep up with the latest information on healthcare news, check out HealthMarkets’ Healthcare Reform Update page.


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