Is Obamacare's Individual Mandate Next to Go?
The administration’s latest retreat on Obamacare signals the first tangible sign that the president is moving toward a one-year postponement of the individual mandate, arguably the most controversial provision of the beleaguered Affordable Care Act reform.
It also has added a new layer of complexity and problems for the insurance industry, which has been struggling to meet targets for enrolling Americans in new health plans ever since the disastrous launch of the technically flawed government websites Oct. 1.
Late Thursday, the White House announced that people facing the cancellation of their health insurance plans will be allowed to buy stop-gap catastrophic coverage and will be exempt from penalties if they think the policies being sold on federal and state exchanges are too expensive and decide to go without insurance next year.
President Obama downplayed the significance of the latest rule change during a Friday afternoon press conference at the White House, saying it was directed at a small subset of Americans who are losing their old insurance and can’t readily find an affordable replacement policy. “The majority of folks are going to have different options,” Obama explained. “This is essentially an additional net in case folks might have slipped through the cracks. We don’t have precision on those numbers but we expect it to be a relatively small number.”
Regardless of how many people eventually take advantage of this exception to avoid having to pay a penalty to the Internal Revenue Service beginning in 2015, political pressure is certain to grow to extend the tax penalty armistice to every uninsured American who fails to meet the enrollment deadline because of a myriad of technical problems with the government’s online insurance exchanges.
The requirement that uninsured Americans either buy coverage through the new government markets or pay a tax penalty has been a sore point with GOP critics since enactment of the legislation in 2010, and has been taken up as a cause by many prominent Senate Democrats more recently because of the large numbers of their constituents who have been thwarted from enrolling in new policies on HealthCare.gov.
When asked by NBC's Chuck Todd if the latest rule change is a step toward delaying the individual mandate itself, the president quickly dismissed the notion. "No that's not true," Obama said. "The basic structure of that law is working, despite all the problems."
The president added that over 500,000 people purchased health insurance plans through HealthCare.gov in December alone and that, more than one million people have selected – if not formally enrolled in – new health insurance plans through the federal and state marketplaces.
Joseph Antos, a health care expert with the conservative American Enterprise Institute, predicted that the administration will wait until a final March 31 deadline for signing up for new insurance policies this year before postponing the individual mandate penalty for all Americans.
“It doesn’t make any difference when the announcement is made because the IRS won’t even be looking at any of this stuff before the middle of 2015, after finishing the tax returns,” he said today. “So there is not exactly a real rush to do this. But you know the [mid-term 2014] election is coming up, so I have a feeling they’ll want to make a statement that makes them seem like they’re reasonable.”