You may already know a bit about the Affordable Care Act’s (ACA) individual mandate — likely either because you were forced into a conversation about health care against your will at a family party or because instead of a tax return check you ended up with a bill from the IRS.
Even if you feel pretty solid on what the ACA individual mandate is right now, changes are coming in the new year. Here’s everything you need to know about what the individual mandate means for you now and what it may look like in 2019.
What Does the Individual Mandate Mean Right Now?
The Affordable Care Act gave people new things to consider when it came to their health care. Among these was the introduction of the individual mandate. What this has meant, essentially, is that you’ve had to have a minimum level of health insurance coverage or else face a penalty tax. There are exceptions for those qualifying for a hardship exemption, but most people have had to choose between insurance or the penalty. The ACA’s goal for the individual mandate was to encourage young and healthy people to get coverage, widening the risk pool for insurance plans and lowering premiums.
All that said, the individual mandate was repealed at the end of 2017, set to take effect in 2019. This means that you won’t face any fines or penalties for not having enough health care coverage (that is, unless you live in a state that has or is planning to implement an individual mandate of its own). So individuals in most states who don’t carry coverage in 2019 will no longer face fines for 2020.
How Will the Change Affect Me?
The repeal of the ACA individual mandate won’t necessarily affect anyone who gets insurance through their employer or any public health program like Medicare or Medicaid. And, really, it won’t affect anyone at all until after they’ve done their 2018 taxes.
For your 2018 taxes, you’ll still need proof of health insurance coverage under the mandate or you’ll be subject to the tax penalty. Not having health insurance this year will cost you $695 per adult and $347.50 per child for a maximum of $2,085 per family, or 2.5 percent of your household income, whichever is greater.
The nonpartisan Congressional Budget Office estimates that 4 million people won’t have insurance in 2019, and 13 million people may be uninsured by 2027. Premiums may rise as insurers prepare to insure fewer people or exit the Marketplace altogether. Subsidized health plans will still be available on the Marketplace in 2019, but fewer people may qualify for them if subsidies rise in accordance with new, higher premiums.
What Are My Options?
While you may not be mandated by law to carry health insurance starting in 2019 for the 2020 tax year, you might still save money overall by continuing your health coverage with a traditional ACA plan. A health plan that meets the ACA’s minimum essential coverage has a better chance of making sure that if you run into a major medical emergency or need an expensive prescription, you’ll avoid a huge medical bill. And, of course, solid health insurance will also help you take care of your health, preventing minor issues from ballooning into serious conditions.
If you’re fairly young and healthy, though, or if you don’t think you’ll need much help managing your health in the near future, you could consider forgoing a traditional health insurance plan altogether. In that case, check out a short-term or a supplemental plan. In some states, short-term plans are available for up to 364 days, with up to two renewals. And plans like critical illness or fixed indemnity insurance pay out cash to help cover costs like medical bills and loss of income, and their monthly premiums are often much lower than those of full-coverage health plans.
Getting covered is still the surest way to protect your health and steer clear of expensive medical bills. Now you just have a little more room to explore options that fit your needs — whether you want coverage for everything or just need a plan in your back pocket for emergencies — without worrying about a penalty.