Paul Ryan Replaces Obamacare’s Insurance Penalties with Even Larger Penalties

Paul Ryan’s Obamacare-lite plan will replace Obamacare’s health mandate penalty with an even larger penalty.

Avalere Health reports that the Ryan plan’s insurance penalty eclipses Obamacare’s penalty.

Paul Ryan’s Obamacare-lite plan will replace the individual mandate penalty with a premium surcharge for failing to maintain health insurance coverage over 63 days. Individuals without insurance face a 30 percent surcharge of their monthly premium. The penalty will fill the coffers of the insurance companies instead of the government.

Obamacare imposes penalties for those who go without insurance for more than three months. The IRS imposes penalties based on income, and the length at which an individual went without insurance.

Health insurance premiums adjust based on age, meaning that Ryan’s health penalties would be cheaper for younger Americans, and more expensive for older Americans. The Ryan plan’s penalty is not tied to income, unlike Obamacare, making penalties proportionately higher for low-income Americans.

Avalere Health reports that “a 50 year old individual at 100% of the federal poverty level ($11,880 in income for 2016) could pay over $1,000 more in penalties under AHCA for not having insurance in the prior year than what she would pay for not having insurance under the current law.  Finally, unlike the ACA individual mandate penalty, the AHCA’s penalties are not prorated based on how long someone is uninsured, so penalty increases are higher for those who have shorter gaps in coverage.”

Caroline Pearson, senior vice president at Avalere, said, “The continuous coverage penalty functions much like today’s individual mandate, but it increases penalties for lower-income and older individuals, and it reduces penalties for younger and wealthier people.”