A Deeper Look at Individual Responsibility Requirement – Say Ahhh! A Children’s Health Policy Blog

Community Catalyst and Georgetown’s CCF have just
finished up a piece that explores in detail the way that
the new individual responsibility requirement will work.  With all of the controversy and
rhetoric surrounding the requirement, it seemed a good time to take an
objective, detailed look at how it will actually work. 

Plus, even though it doesn’t go into effect until 2104,
we wanted to write about the individual responsibility requirement because it
is the foundation on which much of health reform rests.  It allows the country to move forward
with popular insurance reforms, such as the ban on excluding people from
coverage if they are sick, and plays a major role in expanding coverage.

In working on this Q & A, a few particularly interesting
themes emerged, including:

  • Nearly everyone is expected to secure coverage, but
    they won’t necessarily face a penalty if they don’t do so.  Very, very few people are exempt from
    the individual responsibility requirement.  Just people in prison, with strong, documented religious
    objections, and undocumented immigrants (who are left out because they are
    denied help in securing coverage through Medicaid, CHIP and the Exchange.)  But, lots more people are exempt from a
    penalty if they end up not complying with the requirement, including those who
    can’t afford coverage, experience shorts gaps in coverage, fall below the tax
    filing threshold (which hovers around the poverty line, but can be somewhat
    below or above based on family size), or are native Americans.
  • When it comes to children, IRS rules determine who is
    responsible for getting them coverage. 
    Parents (or caretakers) are obligated to secure coverage for their
    children; if they don’t, they may be subject to a financial penalty when they
    file their taxes.  Interestingly,
    it is the parent(s) who claims a child as a dependent on the tax form who is
    responsible for securing her coverage, not necessarily the parent who is living
    with the child and taking care of her on a daily basis.  While not a big deal for many families,
    this policy could be a bit complicated in some divorced or never-married
    families where a non-custodial parent is claiming a child as a dependent for
    tax reasons.
  • The Massachusetts experience with a coverage
    requirement went surprisingly smoothly. One of the more interesting Q & As
    in the document is about the Massachusetts experience with a coverage
    requirement.  Advocates in
    Massachusetts have dubbed it the “dog that didn’t bark,” reflecting that it has
    generated relatively little controversy and 98.6 percent of taxpayers properly
    reported their insurance status on their tax forms. Not everyone is like the residents of the Bay
    State, and so it may be a different story when 2014 arrives.  But, a very interesting reminder that a
    coverage requirement that is implemented well and backed up by strong
    initiatives to make insurance affordable can go surprisingly smoothly.

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