Health insurance penalty for failing to purchase coverage will remain

Health care vote insurance Donald Trump

Those opposed to the Affordable Care Act once again failed to pass the whittled-down version of the GOP legislation.

The latest attempt by opponents of the Affordable Care Act (ACA) to remove the health insurance penalty for not being adequately covered have failed yet again in passing legislation to repeal President Barack Obama’s health care law. On Friday, the Senate defeated the most recent version of the health care law’s repeal legislation.

Among the main reasons cited by GOP lawmakers for trying to overturn the ACA is the penalty for the uninsured.

The Affordable Care Act applies a health insurance penalty when people fail to purchase coverage. Republicans have objected to this tax penalty, particularly in the case of Americans who are not benefiting from the health plan subsidies offered to people in certain income groups. GOP lawmakers pointed out that some states are now facing their second year of double digit health insurance rate increases, placing some Americans in a position in which they can’t afford coverage and are facing a penalty as a result of it.

The health insurance penalty for the uninsured was only one of several toned down points in the repeal legislation.

Health insurance penalty Donald Trump “There is no doubt whatsoever that premiums in the individual insurance market would go up,” said Kaiser Family Foundation’s Larry Levitt. The nonpartisan group’s Senior Vice President for Special Initiatives went on to say “There is irony here in that the mantra from Republicans throughout this debate has been the need to lower premiums, but this step would do just the opposite.”

Premiums would have risen regardless as health insurance companies were afraid that if the penalty was not in place, the tax penalty would no longer incentivize coverage for healthy people. Should healthy people drop their coverage, insurers must increase their premiums to pay for the claims of the unwell. When health insurance companies are covering primarily sick and injured people, it is more expensive for them to do business and it is reflected in their rates.

That said, the health insurance penalty for those without coverage is remaining in place for now as the latest attempt to repeal the Affordable Care Act was unsuccessful.

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