While mandatory health insurance is not yet part of nationwide health insurance reform, the topic has recently drawn a lot of attention and debate. President Barack Obama’s Affordable Health Care Act has many believing that mandatory health insurance is not far away. Residents of Massachusetts have already lived in a mandatory health insurance state since 2006. Other states, such as California, have considered the idea as well.
Health insurance may not be mandatory, but it is necessary if you do not want to risk bankruptcy over medical bills. Compare health insurance quotes now simply by entering your zip code here.
What is mandatory health insurance?
Mandatory health insurance refers to state or federal government laws that would require individuals to carry some form of health insurance to prevent people from facing medical bills that are unable to be paid. Mandatory health insurance typically involves incentives for businesses to offer insurance to their employees and penalties to people who continue to choose not to purchase health insurance.
Where in the U.S. is health insurance mandatory currently?
Currently, Massachusetts is the only state that has fully enacted a mandatory health insurance law. The law was passed in April of 2006 by Governor Mitt Romney and began being implemented the following year. The goal of the Massachusetts Mandatory Health Insurance Program was to have 95% of state residents covered by health insurance within three years.
Some of the key aspects of the Massachusetts plan include:
- Businesses not offering health insurance benefits are required to pay a fine of $295 per employee per month.
- Those individuals who qualify for Medicaid are required to obtain it.
- Those families who do not qualify for Medicaid but cannot afford regular insurance are offered state provided health insurance on a sliding payment scale based on incomes.
- Tax penalties and wage garnishments are penalties for those who choose not to purchase health insurance and can afford to do so, based on their income.
What are the pros of mandatory health insurance?
The debate over mandatory health insurance brings out strong opponents and proponents. Those who argue for a system where health insurance is mandatory argue the following pros:
- Universal health insurance coverage for all
- Greater health care equality
- Force insurance companies to provide more affordable health insurance
- Greater regulations can be placed on insurance companies to prevent them from taking advantage of individuals
What are the cons to mandatory health insurance?
While there are many pros to mandatory health insurance those who oppose it will also tell you about the cons to a plan like this. These cons include:
- Government intruding too deeply into civilian lives
- The cost for individuals and small businesses
- Costly for the government to enforce which most likely would mean a tax increase
- Burden on businesses to provide insurance to all employees and retirees
How does the Affordable Care Act differ from mandatory health insurance?
The Affordable Care Act, passed by President Obama in 2010, stops short of enacting mandatory health insurance, but does place mandates on insurance companies and employers to protect consumers and make it easier for them to purchase and keep health insurance coverage. Some provisions of this law include:
- Insurance companies can set no lifetime limits
- Insurance companies cannot drop your coverage due to illness
- Increased coverage available for young adult’s on their parents’ insurance plan
- Insurance companies cannot deny coverage to children with preexisting conditions
- Restrictions placed on annual limits that insurance companies can impose
- By 2014, a new insurance marketplace of state run insurance exchanges will be established to help individuals and small businesses purchase affordable health insurance
- Tax credit for small businesses that provide insurance for employees
- Provisions making it easier for businesses to provide health insurance coverage to retirees who are not yet eligible for Medicare
How does this impact you?
Unless you live in Massachusetts, you are not yet required by law to have health insurance, yet it is in your best interest to purchase it. Most people who are forced into bankruptcy in this country end up there due to medical bills they are unable to pay. All it takes is one emergency stay in the hospital and you could owe more in medical bills than on your mortgage.
While it does not mandate health insurance, the Affordable Care Act does help individuals to purchase health insurance that is more affordable. It also puts stricter regulations on insurance companies to treat consumers fairly.
If you do not currently have health insurance, get started now finding insurance with an affordable premium in your area. Click here and enter your zip code for a list of health insurance quotes.