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Health Care Reform:

Health Insurance & Affordable Care Act

FAQ: How Will The Individual Mandate Work?

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CBO estimates that in 2016, after the major provisions of the health law are implemented, 24 million people will be exempted from the mandate's penalties.

Q. Why is there a mandate anyway?

A. The health law was designed to extend insurance to nearly all people, including those who have medical conditions that require expensive care and are often denied coverage today. But to pay for their care, insurance companies need to have a large enrollment of consumers, especially young and healthy people who use fewer services. The mandate was adopted to guarantee a broad base.

Topher Spiro, the vice president of health policy at the Center for American Progress, a left-leaning nonprofit that supports the law, says it will be more effective with the mandate than without it. "This individual mandate is to keep premiums low for everyone," he said, noting that "if you don’t have incentives for everyone to sign up for coverage then only the sick people will enroll which will drive up premiums."

But others suggest the mandate won't be effective because the penalties are set so much lower than the cost of coverage.

"The mandate was an attempt to get around the fact that insurance is going to become a lot more expensive for a lot of people even with the subsidies," said Joseph Antos, an economist with the conservative American Enterprise Institute. Antos believes the tax penalty for remaining uninsured is too low and questions the government’s ability to identify those who end up not filing taxes. "I would argue that the individual mandate is largely unenforceable and does not turn out to be this solution to the other problems that raise insurance costs for that particular group of people," he added.

Q. How do I satisfy the mandate?

A. Health coverage provided through a job-based plan (including COBRA or a retirement plan), policies that you bought for yourself or your family, Medicare (and Medicare Advantage), Medicaid, CHIP, some Veterans Administration health programs or TRICARE coverage for members of the military and their dependents will satisfy the mandate.

If you are uninsured or thinking about switching plans, you can shop for coverage through the online marketplaces beginning Oct. 1. These marketplaces will operate in every state and the District of Columbia and will alert people with lower incomes that they are eligible for Medicaid. The marketplaces will also offer tax subsidies to help reduce the cost of premiums if your income is less than 400 percent of the federal poverty level ($45,960 for an individual and $94,200 for a family of four in 2013) and cost-sharing subsidies that will substantially reduce the deductibles, copayments, coinsurance and total out-of-pocket spending limits for people with incomes up to 250 percent of the federal poverty level ($28,725 for an individual and $58,875 for a family of four in 2013).

Fri, Aug 30 2013

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