Doubts linger over merits of individual mandate penalty

Barack Obama gives ACA speech

Amid renewed concerns about the Affordable Care Act, critics remain skeptical about whether the law's individual mandate penalty provides sufficient incentive to compel individuals to buy health insurance.

Starting in 2016, the penalty for remaining uninsured jumped up from $325 per adult or 2 percent of household income to $695 per adult or 2.5 percent of household income. Preliminary figures from the IRS show that for tax returns filed in April 2016, 5.6 million returns included penalties averaging $442, the New York Times reports

The rationale behind paying the IRS instead of health insurers is simple economics: “The penalty would be less than two months of premiums,” Atlanta-based business consultant William Weber told the NYT.

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Still, it’s a risky choice: Weber said he hopes that he, his wife, and his two kids don’t experience a major medical emergency next year. An estimated 43 percent of the 27 million uninsured individuals are eligible for financial help to buy health plans, FierceHealthPayer has reported.

One alternative to the current policy is to increase the penalties. Jonathan Gruber, a central architect of the healthcare reform law, said a larger penalty is “probably the most important thing” experts would agree on to solve the issue, The Hill reports.

Such a policy shift has its own critics: Consumer advocates argue higher penalties would need to accompany greater financial assistance to buy health plans, according to the Times article.

On a broader scale, consumers are more preoccupied with reducing prescription drug prices and ensuring health plans offer adequate provider networks than they are with rolling back the ACA, according to a new Kaiser Family Foundation poll. Among Democrats, Republicans and independents, 63 percent think reducing drug prices should be the biggest healthcare priority in 2017, while 37 percent think repealing the ACA should be the top priority.

Meanwhile, the political war over the ACA isn’t likely to go away soon: 54 percent of likely voters say the healthcare reform law is working poorly, according to a joint Politico-Harvard school of public health poll.

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