4 Questions You May Have About the Individual Health Insurance Mandate

By Meredith Ledford on February 9th, 2010

Health Insurance

Reforming the health insurance system may have a direct impact on you and your family. For this reason, there are a few policies under debate that you should know about, including the individual mandate.

Here are four questions you may have about the individual mandate:

Q: What is the individual health insurance mandate?

A: With few exceptions, an individual mandate would require everyone to have health insurance coverage.

Q: How can I meet the individual mandate requirement?

A: You could meet the mandate requirement by having employer-provided health benefits, purchasing your own individual health insurance, or by buying medical coverage through the proposed insurance exchange. Should you qualify for Medicare, Medicaid, or another government program, enrollment in one of the entitlement programs may also meet the individual mandate requirement.

In order to meet the individual mandate requirement, the program you enroll in should cover essential benefits defined by the Secretary of Health and Human Services.

Q: Would health insurance be affordable enough, so that I can comply with the individual mandate requirement?

A: Both the House and Senate bills have provisions that prohibit insurers from charging higher premiums or denying health insurance coverage to those who are sick or have preexisting conditions. Both bills provide tax credit to those with low-income, so that coverage can be purchased. Also, the income threshold would be increased so that more individuals would be eligible for Medicaid.

Q. How would an individual health insurance mandate be enforced?

A. The mandate would be enforced through a tax that would be applied when you file your income tax return. The House bill would impose a tax equal to 2.5% of adjusted gross income that exceeds the filing threshold. Currently, the proposed thresholds are $9,350 for individuals and $18,700 for couples filing jointly. This means that an individual with an income of $25,000 who failed to obtain coverage would pay a penalty of $391 if he failed to obtain coverage. The Senate bill would impose a similar penalty, or may impose a flat penalty of $95 if you do not have coverage starting in 2014. If you can demonstrate that you cannot afford coverage, you may be exempt from the mandate.

It is still unclear what the outcome may be on health care reform. If an individual mandate is included, you should be prepared and get a free health insurance quote to ensure that your health insurance needs are met.

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