Individual mandate repeal causes health insurance gap in many states

Health Insurance Gap - Mind the Gap platform

Several states are now scrambling to come up with a way to make coverage more affordable.

After the individual mandate penalties were removed for failing to purchase coverage, a health insurance gap has formed in many states across the country. This has left some states struggling to make their health care affordable.

As people drop their coverage health care in the states will become increasingly expensive.

The only state in the country that required coverage after last year’s dismantling of the Affordable Care Act was Massachusetts. Increasingly unfavorable markets caused health insurance companies to withdraw from many states. This situation worsened as the individual mandate noncompliance penalty was removed, causing many healthy individuals to choose not to renew their increasingly expensive coverage.

As healthy policyholders were meant to make it possible to cover those who are ill, their lack of participation made covering people with existing conditions far more expensive. This forced health insurance companies to seek to further increase their premiums or to withdraw in greater numbers.

States are now moving quickly to try to reduce the impact of the growing health insurance gap.

Governor Phil Murphy (D), for example, and the New Jersey Legislature are seeking to mitigate their own risks. They are making moves in the hopes that more state residents will keep their coverage. Moreover, they are also hoping to make it more appealing for employers to offer health plans.

Senate Health Committee Chair Joe Vitale (D-Woodbridge) sponsored A-3380 along with Assemblyman John McKean (D-West Orange), the chair of Assembly Financial Institutions and Insurance Committee. That was recently signed into law, reinstating many of the Affordable Care Act requirements. For instance, residents unable to provide proof of health insurance coverage when they file their taxes will once again face penalties.

Health Insurance Gap - Mind the Gap platformThe penalties will reflect the approximate cost of a bronze level insurance plan. For the average household, this would be around $2,085, reported The goal is to encourage more state residents to fill the health insurance gap in New Jersey by choosing to pay for the coverage rather than pay a penalty for around the same amount while remaining uninsured.

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