The Affordable Care Act’s tax penalty for people who opt out of health insurance is one of the most loathed parts of the law, so it is no surprise that Republicans are keen to abolish it. But the penalty, also called the individual mandate, plays a vital function: nudging healthy people into the insurance markets, where their premiums help pay for the cost of care for the sick. Republican lawmakers think they have a better alternative.
The GOP approach is called a “continuous coverage” penalty. It increases the cost of the premiums for anyone buying an individual insurance policy if they have gone 63 or more consecutive days without health insurance in the previous 12 months. Their monthly premiums would rise by 30 percent, and that surcharge would last for a year. While Obamacare assesses a fine for each year people don’t buy insurance, the GOP plan would punish those who decide to purchase health insurance for the first time ever, or after a lapse.
Much is at stake. If the GOP approach fails to
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