2020 OPEN ENROLLMENT ENDS (most states)

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Maryland: Dems reintroduce individual mandate "down payment" bill

Last spring, both New Jersey and Maryland were among the states which were the most pro-active about passing lesiglation to cancel out Donald Trump's attempts to deliberately sabotage the Affordable Care Act. Both states passed laws cracking down on non-ACA compliant short-term and association health plans (NJ actually already didn't allow short-term plans before the ACA anyway), both states established robust reinsurance programs, and both states tried to pass bills reinstating the ACA's Individual Mandate Penalty which Congressional Republicans repealed last winter in different ways.

New Jersey was successful: They kept their mandate penalty restoration bill pretty much identical to the version repealed at the federal level and plan on using the revenue from it to help pay for the reinsurance program. The combined impact of all of their anti-sabotage efforts led to roughly a $1,500 annual premium savings for every unsubsidized individual market enrollee in the state.

State legislators in Maryland went a different way--instead of a simple "get covered or pay a penalty", they tried going with a different approach: Instead of having to pay the $695 penalty for not having ACA-compliant healthcare coverage, they proposed giving people the option of applying that money towards an ACA policy instead:

Maryland lawmakers want to create an individual health care mandate at the state level — in response to Washington gutting it at the federal level — and turn it into a down payment for people to pay for health insurance.

...Under Maryland legislation, the state would offer people without insurance a choice — pay a tax penalty or use the money as a down payment on insurance.

"We're saying, instead of just paying the penalty and being off the rolls, we're going to take those dollars and deploy them in such a way as to use it as a down payment to allow you to make a decision to actually purchase health insurance," said state Sen. Brian J. Feldman, D-Montgomery.

Here's the bill summary from last spring (HB1167).

For one reason or another, the bill never went anywhere last session...as far as I can tell, it never made it past a single hearing before being lost in the shuffle.

The good news is that Maryland's other moves, including an especially robust reinsurance program, caused 2019 premiums to drop (relative to what they'd be otherwise) even more dramatically than in New Jersey: Around $3,200 per unsubsidized enrollee. The bad news is that even at that, 2019 rates in Maryland will still be around $500 more than they would have if the mandate hadn't been repealed...or if HB1167 had been successfully passed and signed into law.

Today, however, it looks like HB1167 is being dusted off and reintroduced for the 2019 legislative session (via Morgan Eichensehr of BizJournals):

Maryland lawmakers and health care advocates have proposed a new state program that seeks to replace the unenforced federal mandate requiring every citizen purchase health insurance.

Sen. Brian J. Feldman of Montgomery County and Del. Joseline A. Peña-Melnyk of Prince George’s County joined health care advocates and businesspeople in Annapolis Tuesday to announce a new legislative effort aimed at establishing a "health insurance down payment plan." The plan calls for Marylanders to either purchase health insurance on their own, or else pay a state tax penalty for being uninsured. It would essentially serve as a replacement of the mandate levied by the Affordable Care Act (ACA), which the Trump administration has said it would not enforce.

A bill outlining the plan will be considered by the General Assembly in 2019.

...DeMarco explained why the program is considered a "down payment" instead of only a mandate. When Marylanders are asked on their annual tax forms whether they have health insurance, he said, they will get the option to either pay the $695 per adult annual penalty for being uninsured, or put that money toward purchasing a plan.

I'm not sure about Feldman, but Peña-Melnyk was also one of the sponsors of the bill last spring. I don't know if this version is identical or if there's any differences between the two; it certainly looks the same on the surface.

This is a great idea in my view--after all, the whole point of the mandate penalty was never to "punish" people, the point was to a) encourage (goad?) them into actually getting adequate healthcare coverage and b) to help improve the overall risk pool in order to keep premiums down. Ideally, no one would ever have to pay the penalty itself since everyone would get covered...so it makes sense to give the option of applying the penalty payment towards coverage. In addition, anyone below 400% of the Federal Poverty Line would qualify for tax credits as well, which would help cover their expenses.

Keep an eye on this...unfortunately, even if it gets passed and signed immediately in January, I presume it won't go into effect until 2020.