With the reveal of the American Health Care Act (AHCA) on Monday evening, Republican authors claim to have killed the “individual mandate”—the requirement that everyone who chooses not to purchase insurance pay a $695 annual penalty.
It’s true that the words “individual mandate” appear nowhere in the bill. So, since insurance works when many people—ideally all of them—buy in, how does the bill get young, healthy people to buy insurance instead of rolling the dice?
This is where the very important “continuous-coverage incentive” comes in, under Section 133. This is really a penalty for anyone who goes without insurance for 63 days. (Why the number is 63 is unclear to me.)
“The continuous coverage incentive is designed to limit adverse selection in health-care markets,” the House summary reads. Anyone who goes without health coverage for any reason has to pay “a flat 30-percent late-enrollment surcharge on top of their base premium” for the next year.
This is a one-time fee: The “surcharge” is the same whether you’re uninsured for 64 days or 64 years. It’s like once you’ve decided to park illegally and know you’re going to get a ticket, you might as well stay a while.
Avoiding the word “penalty” doesn’t make this not a penalty. And when there is a penalty for people without insurance, a person could reasonably say that insurance is “mandatory.” For individuals.