Maryland lawmakers propose state-level individual mandate—with a twist

Two Democratic members of the Maryland legislature want to enact a policy that is similar to the ACA's individual mandate. (Image: Getty/mj0007)

Maryland has become the first state to fire back at one of the GOP’s most recent efforts to undermine the Affordable Care Act: the repeal of the individual mandate.

On Tuesday, two Democratic state lawmakers said they plan to create a program that—like the individual mandate—would levy a fee on any resident who does not buy health insurance. But that money could then be used as a “down payment” to enroll that person in a health plan via the state’s ACA exchange. 

“We’re presenting folks with the opportunity to make a rational economic decision,” said Sen. Brian Feldman, according to The Washington Post. Feldman and Del. Joseline Peña-Melnyk will outline the new program in forthcoming legislation.

It’s not yet clear, however, whether Republican Gov. Larry Hogan will sign such a bill if it passes the state legislature. Hogan has joined other governors in opposing the repeal of the individual mandate, the Post article noted. But at a news conference on Tuesday, he said he’s “in favor of providing incentives rather than punishment or penalties” to encourage people to get covered.

Regardless of what happens in Maryland, Congress’ recently passed tax bill will eliminate the current fine levied on those who don’t maintain continuous health coverage, effective in 2019. A host of healthcare industry trade groups have opposed repealing the mandate, arguing that it may lead healthy people to drop coverage, thus increasing premiums and destabilizing the individual market. 

RELATED: What health insurance executives think of the GOP's plan to repeal the individual mandate

Indeed, the Congressional Budget Office has estimated that repealing the mandate will increase individual market premiums by roughly 10% over the next decade, and result in 13 million fewer people with health insurance. Some experts, though, have questioned whether repealing the mandate will have that large of an effect, arguing it was never a very strong lever to compel people to buy insurance.

Even so, the repeal of the individual mandate marks Republicans’ only real success at undoing the ACA through legislation. Thus, left-leaning states might follow Maryland’s lead by proposing legislation that creates state-level versions of the mandate. 

Some states have already turned to the courts to fight Trump administration moves like ending cost-sharing reduction payments and relaxing the ACA’s contraceptive coverage mandate. In the latter effort they have already notched a win, as two judges have agreed to temporarily halt the implementation of the new contraceptive coverage rules.

States might also counter the new proposed rule expanding the use of association health plans—as well as a forthcoming rule that would lengthen the duration of short-term health plans.