State insurance commissioner to feds: Keep mandatory health insurance tax penalties

The Affordable Care Act is the “law of the land” for the foreseeable future, Speaker of the House Paul Ryan said in March after failed attempts to repeal it.

With that reality, Washington Insurance Commissioner Mike Kreidler recently answered a February call from U.S. Health and Human Services Secretary Tom Price asking states what can be done to strengthen the health law.

Kreidler’s idea: Keep a targeted tax penalty for people who aren’t insured.

The Democrat sent that advice and more in a letter to Price dated Saturday, saying the feds should resist calls from Republicans to weaken or remove the ACA’s mandate.

Kreidler said requiring insurance keeps young, healthy people in the insurance pool to balance out the costs of older people, who often require more health care.

The tax penalty has been an unpopular part of the Affordable Care Act, and the GOP has regularly opposed it as government overreach.

President Donald Trump signed an executive order in late January allowing agencies to “waive, defer, grant exemptions from or delay” ACA rules. Some interpreted that as a signal the enforcement of the individual mandate would end.

So far it hasn’t. Price recently indicated he will keep the individual mandate while Obamacare is still operating. But the Internal Revenue Service announced in February it would continue not rejecting tax returns on which people don’t note whether they had health insurance.

That might make it harder for the IRS to find out who should get fined for not being insured.

Popular or not, the individual mandate is integral to the current health care system, Kreidler wrote.

Economic modeling by the state “predicts that weakening enforcement of the individual mandate will result in people abandoning coverage, especially younger, healthier individuals,” he wrote.

Even some Republicans in the state begrudgingly agree.

State Rep. Matt Manweller, a Republican from Ellensburg, is no fan of requiring people to have health insurance. He explained the mandate’s birth as “government created a series of problems, and then they tried to fix it with a worse solution, which was the mandate.”

Even so, he said any change to the health care law has to be done “comprehensively,” not by taking away chunks of the ACA at a time, like blocks from a Jenga tower.

“You just can’t talk about it in isolated pieces like that,” Manweller said. He said he still thinks Congress will eventually pass health care reform during Trump’s four-year term.

More than 750,000 people have gained health coverage in Washington state because of the ACA, mostly from an expansion of Medicaid, a government health care program for low income people. The state’s uninsured rate has dropped from 14 percent to just under 6 percent because of the law, says a news release from Kreidler’s office.

Compared to most states, Washington’s health care exchange is doing well, too, said Michael Marchand, a spokesman for the Washington Health Benefit Exchange.

Nine insurers sell 98 plans through the exchange, and nearly all counties have two or more insurers, according to the exchange.

Still, insurance premiums will rise an average of 13 percent this year for people using the exchange. Not every county has robust competition among insurers either, Marchand said.

Kreidler’s letter says Congress should also continue paying for “cost-sharing reductions,” or financial help to low-income people to help pay for deductibles, copayments and other out-of-pocket costs.

About 70,000 people got those benefits in Washington last year, Marchand said.

The subsidy is in a legal battle over whether it has proper congressional approval. A federal judge in Washington, D.C., ruled against the ACA, but the case is being appealed.

This story was originally published April 11, 2017 at 7:38 AM with the headline "State insurance commissioner to feds: Keep mandatory health insurance tax penalties."