“A Daily Dose of Truth” (#3): The Requirement to Buy Insurance

~by Rev. Linda Hanna Walling, Faithful Reform in Health Care

Daily DoseTruth is witness to the whole.  One short sound-bite taken out of context — even if it’s a fact — does not necessarily represent the whole truth. We denounce the use of such sound-bites (from any party!) when they are intended to pervert truth for electoral gain. In the end, we acknowledge that a manipulation of facts to frighten and confuse vulnerable populations is just plain immoral.

Health care justice and the common good are best served when everyone is actually IN a nation’s system of health care.  And that’s the whole point of the health care reform requirement for everyone to have insurance.

With everyone IN, we’ll all have timely access to the benefits of health care coverage rather than waiting until too late, or worse, getting no care at all.  With everyone insured, society-at-large partners with the health care system, fairly distributing the responsibilities, costs, risks, and benefits.

The requirement for everyone to have insurance:

  • Protects all of us from the costs of medical care for patients who can pay for insurance but refuse to do so. The subsidies will be designed so as not to impose a burden greater than any one person or family can bear.
  • Affirms the government’s rightful role in regulation and oversight on behalf of the public good.  It is an effort to get everyone playing by the same rules, resulting in fair treatment for everyone fairly in return.

Exemptions to the requirement for insurance:  Persons exempt from the requirement to have insurance will include:  those whose faith communities object to insurance; those without coverage for less than 3 months; American Indians; undocumented immigrants; those with hardship exemptions (for whom the lowest cost plan available exceeds 8% of individual income); and those who earn too much to qualify for Medicaid but earn too little to file income tax.

Penalties for not purchasing insurance:  The Congressional Budget Office and the Joint Commission on Taxation estimate that by 2016 only about 4 million persons (1% of the population) will choose to pay the assessed penalty rather than purchase insurance.  Two-thirds of those would qualify for subsidies in the exchanges; the remaining third would be among the top 10% of income-earners in the U.S.

Those who choose not to purchase insurance will pay a penalty that will help cover the cost of maintaining the health system, including the cost of uncompensated care.  The penalties will begin in 2014 and increase each year:  2014 – the greater of $95 or 1% of taxable income; 2015 – the greater of $325 or 2% of taxable income; 2016 – the greater of $695 or 2.5% of taxable income; beyond 2016 – indexed to the cost of living.

What happens if the requirement to purchase insurance is repealed? 

Insurance costs would likely rise for everyone. In the negotiations leading to reform, this requirement was coupled with the ban on the insurers’ practice of banning persons from coverage because of pre-existing conditions. The costs for adding persons with pre-existing conditions will escalate if the enrolling the sick is not off-set with healthy enrollees.  (One interesting note:  Polls continue to show the usual split between supporters and opponents of reform.  However, once those who support repeal are told it would mean ending the ban on insurance exclusions for pre-exisitng conditions, only a quarter of repeal supporters hold their original position!)

The costs of uncompensated care will continue to increase costs system-wide. Very few people travel through life without accessing the health system at some point. The penalty for not purchasing insurance simply helps offset the medical costs for those who choose not to purchase insurance, but do not have the ability to pay for expensive care.

For more information:

Read the full statement from Faithful Reform in Health Care: Faith Values & Responsibility in Health Care Reform

View the Kaiser Family Foundation YouToons video, Health Reform Hits Main Street, which includes a section that clearly articulates the relationship between the requirement to buy insurance and the ban on insurers’ exclusions for pre-existing conditions.

Read the New England Journal of Medicine article, A Broader Regulatory Scheme – The Constitutionality of Health Care Reform, which discusses the constitutionality of the requirement to buy insurance.

Make a suggestion for future topics based on the mis-information you are receiving in ads, emails, and conversations.  Simply send an email with your suggestions.

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