Health insurance reform opponents continue to spread myths about components of America's Affordable Health Choices Act, including the notion that mandating people to get health insurance coverage is like imposing a new tax on them.
MYTH: Mandating health insurance coverage is like a new tax.
FACT: As President Obama pointed out yesterday: “[F]or us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase… right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase.” [ABC News, 9/20/09]
Also, right now, all insured Americans are paying a hidden health care tax to cover those who go without health insurance. For example, if a person who hasn't purchased health insurance is hit by a car, all the rest of us pay for the health care they receive when they go to the hospital. Indeed, the average insured American family of four pays more than $1,000 a year to cover the cost of health care for the more than 46 million people who - either by choice or necessity - have no insurance.
Fixing our health insurance system to ensure quality, affordable care - and to end an era where insurance companies can discriminate against you because you get sick - requires shared responsibility - on the part of individuals, employers and the government.
The best way to curb rising health costs and unfair insurance company practices is to insure more Americans. Only with a bigger risk pool can the benefits of no discrimination for pre-existing conditions, no waiting periods, and no prices based on health status be enjoyed by all.
According to a recent essay published in the New England Journal of Medicine:
If we required that every person obtain at least a minimum package of health insurance benefits -- that is, issued a so-called individual mandate -- we would eliminate adverse selection, and these barriers would become unnecessary and, in fact, indefensible. Remove them, and being in bad health would no longer prevent people from obtaining adequate coverage. But allow some opportunity for people to remain uninsured, and the straightforward argument for removing the barriers quickly evaporates. [NEJM, 7/2/09]
The House bill makes this idea of shared responsibility work by making affordable insurance available to all, offering small businesses exemptions and tax credits, and offering Americans affordability credits based on income to help pay their premiums. Furthermore, under the bill, there is a hardship exemption for those with circumstances that make no available insurance policies affordable.
For the small number of Americans who would choose a penalty over purchasing affordable insurance, they will be responsible for a penalty based on income and ability to pay - just like those who choose not to purchase car insurance. For example:
- An individual with no children has income of $100,000 and does not purchase affordable health coverage. Assuming the individual does not qualify for a hardship exception, the individual would pay a penalty of $2,266.
- A married couple with 2 children has income of $50,000 and does not purchase affordable health coverage for themselves or the children. Assuming that the family does not qualify for a hardship exception, the family would pay a penalty of $803.
- An individual with no children has income of $30,000 and does not purchase affordable health coverage. Assuming the individual does not qualify for a hardship exception, the individual would pay a penalty of $516.
Without reform, health care costs are expected to increase for the average family by $1,800 each year - that annual increase alone is more than the penalty for not being insured for most Americans.