As Congressional Republicans prepare to send a tax overhaul to President Trump's desk, health care advocates worry about a possible repeal of the individual mandate, the part of the Affordable Care Act (ACA) that requires everyone to have health insurance.
A possible repeal of the mandate could affect a lot of people in Texas, which has the highest percentage of people paying a tax penalty for not having health insurance, according to a New York Times analysis of IRS data.
John Cartwright in Round Rock is one of those Texans who will likely pay a fine when he files taxes early next year. He was laid off from his job in January, and his plan was to get a new job within the next few months.
When his wife got pregnant, his plans changed.
“The conversation came up for me to be a stay-at-home dad, and it just seemed like a great opportunity for me to take advantage of that,” Cartwright said. “That’s how we kind of ended up going forward with that.”
The problem is Cartwright missed a window to sign up for health insurance. Because he was laid off – and he planned on getting a job again – he didn’t sign up to join the health plan his wife gets through her job.
The mandate allows for people who can’t afford an accessible plan to avoid paying the penalty. But because Cartwright had an affordable option – but chose not to sign up – he will likely have to pay a fine.
"I ended up becoming a little S.O.L. for the rest of the year," he said.
Stacey Pogue, a senior policy analyst with the Center for Public Policy Priorities, says people choose not to get insurance for a lot of reasons, but she feels, more often than not, people don’t enroll because they either oppose the ACA on political grounds, or they simply just don’t know how they have access to affordable insurance through the ACA.
Of course, she says, there are situations that are harder to categorize, and what happened to Cartwright is a good example of that.
If Congress gets rid of the individual mandate altogether, people like Cartwright in Texas could catch a break. However, Pogue says, getting rid of it would have serious repercussions for people who end up buying insurance on the ACA market.
“That would make premiums go up 10 percent starting in 2019 over what they would have been otherwise,” she said. “And another big concern is that it introduces all sorts of uncertainty for insurance companies.”
People currently buying plans for 2018 on the marketplace won't be affected by those rate changes, but Pogue says removing the individual mandate could also lead to insurers leaving the marketplace – which could lead to higher premiums.
For Dan Murphy, those premiums in the ACA marketplace are already too high for him.
He’s a subcontractor for a home-builder in East Austin. He used to buy insurance from the ACA, but because his household income is too high to receive subsidies to offset the increase, he's says he's been forced out of the market.
So, he went without insurance this year. Whether or not the mandate is repealed, Murphy likely won’t pay a penalty because he was unable to afford the plan available to him. However, that doesn’t solve a bigger problem.
“I prefer to have insurance,” he said. “Especially with a kid. I’d love to have it, but if it’s starting to approach getting close to my mortgage payment, then I’m not sure what to do.”
House and Senate lawmakers are currently reconciling both of their respective bills before a final OK. While the Senate’s overhaul included the repeal of the mandate, the House’s didn’t. Still, Rep. Kevin Brady, head of the House Ways and Means Committee, has said he expects the repeal will be rolled into the tax bill.
The plan is expected to reach President Trump’s desk before the end of the year.