On Wednesday, Senate Finance Committee Chairman Orrin Hatch (R-UT) and Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) introduced a bill (S. 203) that would repeal the individual mandate within the Affordable Care Act (ACA). The mandate requires that most Americans obtain health insurance or else pay a penalty in the form of an assessed tax. Individuals may be covered through employer-sponsored plans or public programs, such as Medicaid or Medicare, or purchase private insurance that meets specified minimum standards.
The individual mandate has been the target of several lawsuits, including one that was considered by the Supreme Court, who declined to overturn the mandate. Supporters of the ACA maintain that the mandate is a necessary condition of sustaining the long-term viability of the law. A fundamental concept of insurance is spreading risk among a large pool to absorb total costs. Without younger, healthier, and less-costly individuals to spread risk to, higher-cost individuals will eventually drive the cost of health coverage up as premiums rise to cover the costs. The penalty for non-compliance with the mandate is two percent of household income or $325 per year per person this year, which will increase to 2.5 percent of household income or $695 (whichever is higher) in 2016.
Though the White House has not commented on the specific measure, it is likely the President would veto the bill should it pass through Congress. In his state of the union address given earlier this week, Obama strongly supported the ACA and indicated that he will block legislative attempts to dismantle it.