The individual mandate--which requires all Americans to have minimum essential health insurance or else pay a tax penalty--has proven to be one of the most controversial provisions of the Affordable Care Act.
In 2012, the Supreme Court heard the oral arguments regarding the legality of the individual mandate and whether it was constitutional to force Americans to buy a commercial product--and, more importantly, whether the penalty for not having health insurance was a fee and not a tax. Ultimately, the Court upheld the individual mandate.
While opponents of the ACA have been quick to judge the individual mandate, Republican Senators Orrin Hatch (Utah) and Richard Barr (N.C.), as well as Rep. Fred Upton (R-Mich.) have crafted a proposal that aims to address the issues surrounding the individual mandate by building on past bipartisan efforts.
The heart of the Patient Choice, Affordability, Responsibility, and Empowerment Act (Patient CARE Act) includes language indicating strong objection to the individual mandate. That said, it offers different types of penalties that "strike the right balance between strongly encouraging individuals to become insured, while ensuring greater regulatory predictability and market stability, which in turn helps to keep healthcare costs down."
Here's a brief breakdown of the proposal:
Patient CARE Act would provide a one-time enrollment period. After that, it would require individuals to have continuous coverage for at least 18 months.
Insurers would be required to offer a policy to all applicants during the enrollment period. However, there would be no limit on premiums charged to those not having 18 months of continuous coverage--meaning, insurers could potentially deny coverage by setting higher prices.
There are no limits on medical underwriting.
Penalties for not purchasing coverage vary based on the individual. For instance, healthy individuals who are able to obtain 18 months of coverage but choose not to would face small penalties, while sicker individuals would face higher penalties.
Penalties may also include the cost of care of excluded benefits, as well as the inaccessibility of necessary medical care.
In conclusion, the authors note, their proposal "differs from the ACA regarding the appropriate size, timing, and exceptions to penalties when an individual becomes uninsured and then later seeks coverage."
What's more, the proposal indicates some agreement across the political spectrum that insurance markets cannot effectively operate while simultaneously treating individual equitably regardless of health status, the authors conclude.
- here's the proposal (.pdf)