California Considers Implementing Individual Mandate

Published January 24, 2019

In December 2017, Congress passed the Tax Cuts and Jobs Act, which lowered tax rates for millions of Americans and reduced Obamacare’s individual mandate penalty to $0.

The Obamacare mandate required young, healthy individuals who might not purchase health insurance, to buy insurance or pay a tax penalty. Although there is no longer a federal individual mandate penalty, several states have taken matters into their own hands, forcing residents to buy health insurance. In 2018, New Jersey, Vermont, and the District of Columbia implemented individual mandates laws, with more states considering mandates as well. 

‘Violation of Individual Liberty’

Justin Haskins, executive editor and research fellow at The Heartland Institute, which publishes Health Care News, says it is immoral to force individuals to buy expensive health insurance.

“Imposing an individual mandate to purchase health insurance is an egregious violation of individual liberty,” Haskins said. “The government has absolutely no business forcing people to buy products simply because they are living and breathing, and that’s precisely what individual mandates do.

“Even worse, individual mandates hurt lower-income working Americans and middle-income families more than any other group,” Haskins said. “Wealthy people can afford to pay the penalty, but many working people cannot. Although everyone should purchase health insurance, the numerous mandates, regulations, and taxes created in California and by the Obama-era federal government have made health insurance premiums and deductibles so high that for many people, they simply can’t afford to purchase or use health insurance bought in an Obamacare exchange. To punish these people, many of whom are already living paycheck to paycheck, because they can’t afford a product the government has made unaffordable is highly immoral and abusive.”

CA Prepares for Individual Mandate

Following his election as California governor in November, Gavin Newsom declared his intent to introduce a mandate in the state that will force individuals to purchase health care coverage or pay a fee, effectively implementing Obamacare at the California state level.

The Sacramento Bee reported that many of Newsom’s administrative hires signal a dedication to bringing universal health care to the state of California. Chief of Staff Ann O’Leary once was employed in President Bill Clinton’s administration working on Children’s Health Insurance Program (CHIP), a program that offers affordable health care to children for families that are well-off enough not to qualify for Medicaid but financially strained enough not to be able to afford private insurance.

Newsom’s Cabinet Secretary Ana Matosantos formerly worked for California Gov. Jerry Brown and has extensive experience implementing Obamacare in California. She also reportedly worked with the state legislature to expand health-care coverage for low-income Californians.

‘Disastrous for the Individual Market’

Sally Pipes, Pacific Research Institute’s president, CEO, and Thomas W. Smith Fellow in Health Care Policy, says California legislators might pass the individual mandate in the upcoming legislative session.

“With the Democrats having a super majority in the state Assembly and Senate, it is possible that California may pass and Gov. Newsom may sign an individual mandate,” Pipes said. “This would be disastrous for those in the individual market.”

Pipes says the arguments proponents of the government mandate make are fundamentally flawed.

“Obamacare’s proponents claim that state-level individual mandates would compel young and healthy people to buy coverage through the exchanges,” Pipes said. “This, they say, would ensure a healthy risk pool and prevent insurers from leaving the exchanges or drastically hiking premiums. Their assertions are divorced from reality. The last four years of Obamacare have proven that even a government directive hasn’t compelled the young and healthy to buy insurance they can’t afford. The resulting massive premium hikes have priced millions out of the insurance market altogether. That’s why 55 percent of Americans supported repealing the individual mandate in the 2017 tax reform law, a popular provision in an otherwise-unpopular law.”

Taxes, Taxes, Taxes

Pipes says the mandate would be little more than a tax hike with no benefit to consumers.

“Reinstating the mandate at the state level would effectively be a tax hike on poor and working-class Californians,” Pipes said. “It would pick the pockets of millions of Californians who already can’t afford coverage under Obamacare—without stabilizing the insurance market.”

Jake Grant ([email protected]) writes from Alexandria, Virginia.