Obamacare: The Mandate
The requirement that most Americans have health care coverage starting in 2014 has generated more public outcry than any other part of the Patient Protection and Affordable Care Act (Obamacare). There are various reasons people would not want to buy insurance on their own...
o They are young and healthy, and the chances of them incurring large health care bills are low.
o They would rather use their money for other things.
o They don't like being told what to do
We'll explain on this page why the requirement is a vital part of the law, and how you can comply with it.
Do I really need to buy health insurance? Why?
The mandate has been a key component of the Patient Protection and Affordable Care Act (ObamaCare) since 2014.
It says that if you don't have health insurance that covers certain essential health benefits, you will pay a penalty. There are a few exceptions - for example if your household income is less than the federal poverty level.
Although you are required to have insurance, the government will help you pay for it. For example...
As part of the 2017 tax overhaul, the penalty for not having insurance has been eliminated. So at least for 2019, you effectively are not required to purchase insurance.
The mandate keeps costs down
The easiest way to understand why the mandate is important and what it does is to imagine a situation without it.
ObamaCare requires insurance companies to insure everyone - regardless of their health status. Without the mandate, people who have the most health issues - such as cancer or diabetes - still would buy insurance. Those who are young and have no immediate health concerns might not.
Here's what would happen...
It's worth noting that ObamaCare still works as intended without the mandate - because the government still is subsidizing insurance for millions of Americans who otherwise would not be able to afford health care.
It's just that by eliminating the mandate, Americans pay more in both premiums and taxes.
Not requiring insurance actually helps nobody
Eliminating the mandate also means that fewer people will have health insurance. Some because they feel healthy enough to skip it, and some because higher premiums made it unaffordable. And of course some simply because they choose to not buy it.
That may help some of them in the short term. But for the unfortunate ones who find themselves with an unexpected illness or injury, the requirement to buy insurance could make a difference in their financial health for the rest of their life.
In some situations the government would provide for their care - in which case their decision to not buy insurance becomes the burden of taxpayers (we will ignore the option of refusing to treat someone for an emergency).
But there's a more subtle harm to young healthy people who don't contribute to the health care system while they still are less likely to need it. When they eventually do need it, the generation of young healthy people coming up behind them likely will make the same choice - thus not helping pay for their health care expenses. So they likely would end up paying just as much over the long term anyway.