Health Law Checkup - November 2011
What's Up With the Individual Mandate in the Health Care Reform Act?
What’s Up With the Individual Mandate in the Health Care Reform Act?
The legal battle over the constitutionality of the Health Care Reform Act (Act) is on its way to the U.S. Supreme Court for a final decision. To date, multiple federal trial courts have been sharply divided on the constitutionality of the “individual mandate” requirement. The individual mandate is but one provision in a massive piece of legislation—but most consider it to be the linchpin to provide affordable health insurance coverage for all. This is because the Act requires all individuals to obtain health insurance or pay a penalty. The Act presumes that the vast majority of people will elect to purchase insurance rather than to pay a penalty. In exchange for providing a broad pool of insureds paying premiums to insurers, the Act prohibits insurers from denying coverage to applicants with pre-existing conditions, setting lifetime limits on coverage and setting annual benefit limits. If the individual mandate is invalidated, this balance collapses.