WASHINGTON – The Affordable Care Act’s requirement that all Americans carry insurance or face penalties, part of the effort to gain universal coverage, may not be much of a rule at all.
The Obama administration said that millions of people may be exempt from the requirement known as the individual mandate. Homeless people or homeowners who’ve been foreclosed upon can apply for an exemption. So can those whose utilities have been shut off; who have suffered domestic violence; or who have experienced a death in their families.
In December, the administration said people whose existing health plans had been canceled wouldn’t have to comply with the mandate. Last week, the government said that exemption will be extended through 2016. In a catch-all category, anybody who believes they’ve had a “hardship in obtaining insurance” can apply for an exemption – documentation is optional.
“If you’re a consumer and you’re looking at this, it leaves a lot of ambiguity,” Dan Mendelson, the president of Avalere Health, a Washington consulting firm, said by telephone. “You don’t know if you qualify for a hardship exemption but you are very likely to fall into one of these categories – or are able to get into one of these categories.”
Republican opponents of the Patient Protection and Affordable Care Act said the law’s individual mandate is so riddled with exemptions that it’s almost impossible to run afoul of it. They have pressed the Obama administration to formally lift it. House Speaker John Boehner, R-Ohio, said the administration may have intentionally gutted its own mandate.
“Quietly, without any fanfare, there’s a real question about whether the White House has just abandoned the individual mandate, the heart of Obamacare itself,” Boehner said Thursday. “This is a huge public policy decision that could affect millions of Americans.”
No provision of the law is more controversial than the individual mandate, a concept that even Obama didn’t support until after he was elected president. Health insurers have said that to remain financially viable while offering coverage to everyone, the government also must require all Americans to obtain insurance.
“We have consistently raised concerns about any effort to sever the link between insurance market reforms and the individual mandate,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the industry’s Washington lobby group, said in an email.
Most Americans don’t have to worry about the law’s mandate because they’re covered by health plans offered by their employers or government programs, including Medicare and Medicaid. Only about 5 percent of the population bought insurance for themselves in 2012, according to the Kaiser Family Foundation, a Menlo Park, Calif.-based nonprofit group that studies health care issues.
With just weeks until the March 31 enrollment deadline for 2014, the Obama administration has begun warning Americans that a tax penalty will apply if they don’t carry insurance starting April 1.
There are 14 categories of exemptions, including one covering low-income people who have been denied Medicaid coverage in the 25 states that have declined to expand that program under the health care law. That population alone may number about 5 million.
People liable for the mandate who don’t have insurance will pay fines, in the form of extra taxes next year, amounting to as much as 1 percent of their income. Exemptions from the mandate will be decided on a case-by-case basis, the government said.