Individual Health Insurance Mandate Under Health Care Reform

Effective in 2014, the new health care reform law will implement an individual health insurance mandate. When the mandate goes into effect, most Americans will be required to purchase health insurance or will have to pay a fine. Consumers will have to purchase plans that are comprehensive and have a minimum amount of coverage.

Why is there an individual mandate?

The mandate is necessary for health care reform to work and remain affordable. Starting in 2014, insurance companies will not be able to deny health insurance coverage to people with pre-existing conditions. As people with medical conditions start to enroll for coverage, the mandate will require healthy individuals to enroll at the same time.

This will help keep health insurance costs from skyrocketing because the number of healthy and unhealthy people will be balanced.

Without the individual mandate, people would wait to get health insurance until they were sick, which would drive up costs for everyone else.

What if I don't get health insurance when the individual mandate starts?

If you do not have health insurance starting in 2014, you will have to pay a fine.

Starting in 2014, the fine for not having insurance will be either $95 or 1 percent of a person's income — whichever is greater. Then in 2015, the fine will be either $325 or 2 percent of income. In 2016, the fine will be $695 or 2.5 percent of income. After 2016, the fine will be based on the cost-of-living adjustment every year.

There are exceptions to this rule. Americans do not have to purchase coverage if their income is below the Federal Poverty Line and health insurance premiums would cost more than 8 percent of their monthly income. In this case, most would be eligible for Medicaid or federal subsidies to help pay for health insurance. People who are opposed to the individual mandate for religious reasons also do not have to purchase health insurance.

Why is there debate over the individual mandate?

Many politicians and experts believe that requiring individuals to purchase health insurance is unconstitutional. Some states have passed laws that allow state citizens to opt out of the individual mandate but it is highly unlikely that the state laws will trump federal laws.

Politicians and experts that support the individual mandate believe that without it health care reform will not work. They argue people who are uninsured pass on costs to people with insurance because they visit the emergency room and rack up costs they cannot pay for.