This article was last updated on June 26
Will i still have to pay health insurance penalties (under the Obamacare individual mandate) in 2017 or 2018?
This is the question a lot of Americans are asking under the House and Senate health care replacement bills. The short answer is NO. In fact both bills repeal the individual mandate outright and make it retroactive to the beginning of 2017, so no penalty if you had no insurance this year.
Republicans do however realize that for public health insurance to work they need to encourage healthy people to maintain health insurance plans and pay monthly premiums. Or said another way, they just don’t want sick people or those who just got sick to sign up for a non-employer sponsored health plan at the last minute. Without the threat of “Obamacare” penalties under the individual manadate, alternative methods are being used to keep up insurance plan participation rates amongst healthy Americans. This includes having waiting periods for those who have not had continuous coverage for the last 30 to 90 days (details vary by bill) or by charging a premium penalty (up to 30%) for those who have lapses in their insurance.
Senate Republicans made a last minute change to address the health care plan participation or abuse issue by adding a penalty for Americans who let their insurance lapse (or cannot demonstrate continuous coverage) for two months or 63 days or more. Under the new provision, those who go without insurance will be locked out of getting coverage for at least six months after they sign up. This change is based on lock-out periods in various state level Medicaid programs.
The Republican House bill is less stringent on waiting periods, but instead imposes a 30-percent premium penalty for one year when someone re-enrolls.
But the current health care penalty due when filing taxes will still be in effect if a single Obamacare repeal bill is not passed by Congress and sent to the President for signing into law. And there is still a bit of work to do before this happens in 2017. No matter what happens though, lower income and sickly Americans will sadly face higher premiums or penalties in the years ahead.