The penalty for not having health insurance — the most controversial and unpopular part of the Affordable Care Act — is dead. But it may no longer matter.
“From a practical matter, it won’t have much of an impact,” said Marty Anderson, chief marketing officer for Security Health Plan, an affiliate of Marshfield Clinic.
The penalty was repealed as part of the tax reform and tax cut that was signed into law Friday by President Donald Trump. The change goes into effect in 2019.
The fine is a minimum of $695 for an adult or 2.5% of income, above the federal tax filing threshold of roughly $10,650 for one person.
It was considered too small by many policy analysts and was far less effective than projected.
“Certainly I would prefer to keep it in place,” said Cathy Mahaffey, chief executive officer of Common Ground Healthcare Cooperative in Brookfield. “But I really do think the impact of repealing the penalty will be minimal.”
The mandate to have health insurance or pay a penalty is tied to one of the most popular provisions: requiring health insurers to cover people with pre-existing health problems.
The penalty was designed to prod healthy people to buy health insurance to help offset the cost of covering people with health problems and to discourage people from waiting until they were sick before buying health insurance.
But if people were going to be required to buy health insurance, the cost would need to be subsidized for people with low incomes who could not afford insurance on their own.
That was the underlying idea, and it didn’t work as well it was intended.