Trump has quietly saved millions from ObamaCare’s individual mandate

Thanks to a little-known change made in April by the Trump administration to the exemptions provision of the Affordable Care Act (ACA), millions of Americans will have the opportunity to escape having to pay the ObamaCare penalty imposed on those who are not enrolled in a “qualifying” health insurance plan.

In December 2017, the Republican-led Congress passed the Tax Cuts and Jobs Act, and in the legislation, they included a provision effectively eliminating the ObamaCare penalty. However, the fine won’t be eliminated until 2019, which means those Americans who currently aren’t enrolled in a health insurance plan will be forced to pay the penalty when they file their 2018 taxes in 2019.

{mosads}Under the ACA, Americans not enrolled in a qualifying health insurance plan, as defined by the federal government, must pay a penalty of $695 per adult or 2.5 percent of household income, whichever is higher.

IRS tax data show more than 6.6 million filers were required to pay the ObamaCare penalty in 2015, the most recent year for which data are available. Those penalized paid a total of more than $3 billion for not being enrolled in a health insurance plan. Lower-income and working-class Americans were hit particularly hard by the fine; the adjusted gross income of 36 percent of the 6.6 million people required to pay the penalty was only $10,000 to $25,000.

In April, and without much fanfare, the Trump administration’s Centers for Medicare and Medicaid Services (CMS) issued a new guidance expanding the “hardship exemptions” already allowed by the Affordable Care Act to include several new circumstances not previously permitted under the Obama administration.

Perhaps the most important and far-reaching new exemption will permit those who live in a “country, borough, or parish” in which there is only a single health insurer to avoid having to pay the ObamaCare fine. Those living in counties without any health insurance options on an exchange will also be exempt. This is particularly important because CMS reports there is only one health insurer offering coverage in 51 percent of all counties in the United States. This exemption alone could save millions of filers from having to pay the fine.

CMS’ new exemptions will also allow people to escape the penalty if they live in regions in which there are no “affordable” ObamaCare health insurance plans that don’t cover abortions, but only if abortion is “contrary to one’s beliefs, and the absence of any affordable plan without such coverage causes a hardship in obtaining health insurance.”

Other “personal circumstances” may also exempt a person from the ObamaCare fine, including “if a person needs specialty care by a specialist physician but the affordable plans offered through” the government insurance exchange “do not provide access to such specialty care.” 

Hardship exemptions aren’t automatically granted. To apply, people must fill out an application and mail it to their health insurance marketplace. Other exemptions already in existence include filing for bankruptcy, the death of a family member, homelessness, foreclosure, natural disasters, and other difficulties that make purchasing insurance difficult, if not impossible.

By expanding exemptions to the individual mandate penalty, the Trump administration is once again proving its commitment to finding ways to help people suffering under ObamaCare’s burdensome and costly policies. Health insurance offered through ObamaCare exchanges are in many cases no longer affordable, even when health insurance subsidies help to bring the cost of insurance premiums down.

This is especially true for lower-income and working-class families that can only afford to pay for Bronze Plans — the cheapest ObamaCare insurance plans. Nationally, families enrolled in Bronze Plans must endure a maximum out-of-pocket cost of $13,905, far more than what most people can afford to pay.

If families can’t afford to use many of the benefits offered by a health insurance plan, then what’s the point of having the insurance?

ObamaCare has ushered in higher insurance premiums, skyrocketing deductibles, and numerous burdensome regulatory regimes. It’s also forced millions of people to lose their health insurance plans, contrary to the promises made by President Obama, and pushed tens of millions of people into Medicaid, which offers inferior care. 

The Trump administration understands this, and its efforts to improve the health care system have repeatedly shown President Trump and CMS Administrator Seema Verma take their commitment to find more affordable health insurance options for Americans seriously. 

If Congress were willing to take its own responsibilities just as seriously as the Trump administration has, perhaps America’s health care crisis could finally be resolved.

Justin Haskins is executive editor and a research fellow at The Heartland Institute, an Illinois-based nonprofit that advocates for limited government.