Maryland Might Restore Obamacare Penalty as “Down Payment” for Plans

Maryland may lead the way in responding to Congress’s repeal of the Obamacare penalty for not having health insurance.

In December President Donald Trump signed into law the Tax Cuts and Jobs Act, which included a provision that ends the Affordable Care Act’s unpopular “individual shared responsibility” penalty for not having qualified coverage in 2019.

Health insurers, many health care industries, and ACA advocates argue that the individual mandate penalty is necessary to give healthy people an incentive to get coverage. Without it, many healthy people will go without coverage, leaving the individual market with a disproportionately high share of high-claim sicker enrollees. That in turn will lead to higher premiums, they argue.

The Congressional Budget Office estimated in November 2017 that repealing the mandate would reduce federal deficits by about $338 billion over the 2018-2027 period and increase the number of uninsured people by 4 million in 2019 and 13 million in 2027.

As a result, some states are beginning to look at instituting their own penalties for not having qualified coverage. Maryland state Sen. Brian Feldman (D) and state Delegate Joseline Pena-Melnyk (D) are planning to introduce a plan under which uninsured Marylanders would be liable to pay the fines, but the fines  could be used as a down-payment to buy health insurance.

The idea was included in a report released by the Maryland Health Insurance Coverage Protection Commission on options to stabilize the individual insurance market in the state. Feldman and Pena-Melnyk are co-chairmen of the commission.

Many uninsured people in the state could use the penalty to fully offset the cost of their health insurance, Vincent DeMarco, president of the Maryland Citizens’ Health Initiative, told me.

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