The Individual Mandate in Health Care Reform (Obamacare Act)

Introduction

President Obama’s government has succeeded in introducing the new Obamacare health reform. Contrary to earlier health reforms, Obamacare includes the contentious individual mandate that necessitates most citizens to take health insurance from 2014 or incur penalties. The inclusion of the individual mandate in the health reform has elicited mixed reactions in the United States where it receives support from some people while others dispute its legality and applicability. The individual mandate requires Americans, regardless of health status, to carry health insurance from 2014 and will have the obligation of reporting whether they had insurance coverage in their 2015 tax reports (Balkin 482-483).

The impact of the individual mandate

The voluminous individual mandate law has guidelines from the U.S. Treasury Department specifying the money in penalties imposed under the 2010 Affordable Care Act and the people to be excused from the penalties. There are several real fines imposed should a person decide to disregard the mandate. A person who decides not to take coverage will be charged $95 in penalties in the subsequent year, or 1% of earnings over a predetermined limit, whichever is higher. The fine will amount to about $700 per person in 2016 going forward, or 3 percent of ratable yearly earnings with the rate growing by inflation. However, there are exemptions in the rule for citizens with earnings below the limit that is needed to file a revenue tax return, which is currently about $10,000. Citizens with specific religious exclusions and people who belong to the Indian ethnic groups are also excluded from conditions under the individual mandate. There will be exclusions accessible for indigenous American clans, persons who experienced economic hardships such as loss of family members or insolvency.

Additionally, the status of the unregistered immigrants will not be eligible to the individual mandate in any way. Individuals who acquire a health cover from their place of employment, or are insured under the government health insurance package for persons aged 66 and above are deemed medically insured and thus bear no fines. The national government and states are putting up online marketplaces where citizens can start buying insurance covers before the end of this year. The National Treasury anticipates that most people will be eligible for tax reductions to counteract the rate of monthly insurance premiums (Smith 1723). The Treasury Department has indicated on their website a requirement for all persons to take health insurance and their commitment to rendering the Obamacare health law at a reasonable fee. The objective of the individual mandate is to ensure that almost all American citizens take health insurance coverage to assist in settling medical bills. This was the justification applied by the Obama government to defend the mandate at the Supreme Court; eventually, the court allowed the mandate to stand.

Therefore, from 2014, nearly all citizens will be mandated to obtain health insurance; however, the majority of Americans, about 86 percent, already have health insurance that qualifies, but those who are not insured will be required to do so. The Congressional Budget Office that analyzed the individual mandate law for Congress indicated that by the time the mandate is fully implemented, in 2016, over 7million Americans will be required to pay penalties since they will have failed to obtain health insurance. However, the Obama administration has not managed to convince all the health stakeholders, citizens, and Republican members on the significance of the individual mandate (Smith 1723). This led to a hot legal contest about the constitutionality of the individual mandate in the Supreme Court. Most of the people who opposed the mandate argued that Congress lacked the legal mandate and jurisdiction under the Commerce Clause to gather taxes from individuals. Others contested that the decision to force citizens to take compulsory health cover was unconstitutional.

After a lengthy legal battle, all the Supreme Court judges who heard the petition upheld it as constitutional. The Supreme Court maintained that the mandate, which obligates almost all Americans to get lowest health insurances or incur a fine, is within the Congress’ jurisdiction under the clause “lay and collect taxes”. The individual mandate upheld by the U.S. Supreme Court as constitutional is the administration’s only lever to oblige youthful healthy citizens to contract for nationally subsidized insurance in fresh online health insurance marketplaces that are intended to start registering new donees starting this month (Skocpol l288 -1292). Thus, if only a few newer adults register, insurance expenses could skyrocket and threaten the whole reform crusade. However, it would be difficult to enforce the individual mandate without total cooperation of all the stakeholders in the health sector and the state governments. For instance, it is tricky to implement the new health reform with no individual’s and employer’s mandate.

The enforcement of the individual mandate has also received opposition from the republicans who are demanding its deferral until 2015. However, once the program is fully implemented, it will be successful in addressing the current numerous healthcare disparities rampant in the United States. The personal health mandate in conjunction with additional reforms has worked to strengthen employer based health insurance in Massachusetts. The personal mandate in this state is largely equivalent in capacity and importance with the current Affordable Care Act. Therefore, given the occurrence in Massachusetts, there is justification to suppose that the individual mandate will be successful. Since premium subsidies are comparatively less under the current Affordable Care Act than in the Massachusetts reform Act, this mandate is anticipated to succeed.

Conclusion

The individual mandate is the most contentious feature of health care reform ever experienced in the United States. Nevertheless, if citizens need a heath system that will get rid of the disparities in the existing healthcare system, a mandate is necessary to enable the system perform effectively. This reality is well evidenced by the success in the Massachusetts health care system due to the individual health mandate. Furthermore, there is no proof that any options would reach anywhere near national health insurance. In countries where health care systems have accomplished state coverage, personal mandate is compulsory (Sheils and Haught 2177-2185). The governments of Massachusetts, Switzerland, and the Dutch Republic have made it mandatory for citizens to have health insurance coverage. This option has resulted to numerous health benefits in these nations such as reduced premiums in federal and employer-founded coverage, rise in number of small firms that provide health insurance, and improved cost efficiency of health reforms. The individual mandate and the involvement that it advocates confirms the definition of insurance as defense against future threats and the sharing of those threats once they occur. Youthful and healthy persons may sometimes not require health care insurance, but coverage shields them and the community against the economic calamity of a disease or misfortune. Furthermore, involvement will assist in progressive participation as people grow old, and help them to share risks, which keep the health insurance in place (Chandra, Gruber, and McKnight 293-295).

Works Cited

Balkin, Jack. “The constitutionality of the individual mandate for health insurance.” New England Journal of Medicine 362.6 (2010): 482-483.

Chandra, Amitabh, Jonathan Gruber, and Robin McKnight. “The importance of the individual mandate—evidence from Massachusetts.” New England Journal of Medicine 364.4 (2011): 293-295.

Sheils, John, and Randall Haught. “Without the individual mandate, the Affordable Care Act would still cover 23 million; premiums would rise less than predicted.” Health Affairs 30.11 (2011): 2177-2185.

Skocpol, Theda. “The political challenges that may undermine health reform.” Health Affairs 29.7 (2010): 1288-1292.

Smith, Peter. “Federalism, Lochner, and the individual mandate.” Boston University Law Review 91.1 (2011): 1723.

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