Governors Say Health Insurance Mandate Is Necessary, For Now

WASHINGTON - The Affordable Care Act's requirement that Americans either carry health insurance or pay a fine remains the law's most unpopular feature. Nevertheless, a bipartisan group of governors is insisting that the so-called individual mandate remain in place - at least for now.

In a letter sent late last month, the governors urged federal lawmakers to retain the mandate to help stabilize insurance markets. But the group, which is led by Republican John Kasich of Ohio and Democrat John Hickenlooper of Colorado, also said states should be given the opportunity to devise "a workable alternative" to it, subject to federal approval.

Last week, Republican U.S. Sens. Lindsey Graham of South Carolina and Bill Cassidy of Louisiana proposed a repeal of the ACA that would eliminate the federal mandate. Instead, their plan would leave it up to states to preserve, revise or dump the requirement.

In its early days, the Trump administration signaled it would not penalize people for not having health insurance. The IRS said it did collect penalties this year, although prior to the filing deadline it announced that it would accept returns from those who didn't provide the requested information on insurance coverage. The current penalty is either 2.5 percent of household adjusted gross income, or $695 for an adult and $347.50

for a child, whichever is greater. The maximum penalty is $2,085 for a household.

Health policy analysts say the Trump administration's threat to withhold ACA funding has unsettled insurance companies and destabilized health insurance markets. That is one reason the governors' group favors keeping and enforcing the mandate for now.

Many critics of the mandate object to it on philosophical grounds, noting that it obliges Americans to purchase a product whether they want it or not. Supporters argue that short of universal health insurance, the mandate is the best way to draw everyone - including young and healthy people who presumably will pay more in premiums than they collect in claims - into the insurance pool, thereby making coverage affordable for everybody else.

Several insurers have abandoned markets in parts of the country this year, complaining that too few young and healthy people were enrolling. As a result, the insurers said, they were paying more in claims than they were collecting in premiums. In some areas, the companies sought steep premium increases for next year, bringing protest from many policyholders.

Getting rid of the mandate now might convince even more young and healthy people to forgo insurance, further destabilizing markets and perhaps chasing some insurers out of them, said Greg Moody, director of Kasich's Office of Health Transformation.

"You can't replace it now without the whole market falling apart around us," Moody said.

Once the market is stable, Moody said, states with Democrats in power might try to strengthen the mandate by increasing penalties for non-compliance or strengthening enforcement. More likely, aides to Democratic governors say, those states might not change the mandate at all and instead revise other elements of the law, such as establishing reinsurance pools to help insurers to remain financially solvent.

States with Republicans in control might move to replace the mandate with something other than a direct financial penalty.