Full Citation
Title: Maryland's Down Payment Plan: Helping People Get Health Insurance and Lowering Families' Health Costs
Citation Type: Miscellaneous
Publication Year: 2019
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Abstract: In December 2017, federal tax legislation ended federal enforcement of the Affordable Care Act's (ACA's) requirement that consumers who can afford health insurance must obtain it. Lawmakers took that step despite projections from the Congressional Budget Office and other non-partisan experts that, without an individual responsibility requirement, premiums would rise and the number of uninsured consumers would climb. Last year, New Jersey, Vermont, and other states 1 responded by passing laws that use state tax systems to enforce a requirement for people to obtain coverage if they can afford it. This approach builds on Massachusetts's favorable experience with such a law, in effect since 2006 under both Republican and Democratic governors. By increasing the incentive for young and healthy consumers to enroll, these laws lower average costs and cut premiums in the individual market. Moreover, when fewer uninsured seek hospital care, hospital uncompensated care costs decline, lowering hospital charges to private insurers and saving money on premiums for employers and workers alike. Maryland's down payment plan seeks to achieve even better results by using a more enrollment-oriented approach than federal lawmakers originally devised for the ACA. Instead of imposing tax penalties on the uninsured, the Maryland proposal helps the uninsured enroll into coverage whenever possible. As uninsured residents file state tax returns, they can avoid an insurance responsibility payment by agreeing to get health insurance and keep it through the end of the year. They can apply for financial assistance and immediately begin the enrollment process by simply checking a box on their tax return. That step sends information to the exchange, which reaches out and helps uninsured consumers sign up for coverage. Roughly 130,000 uninsured Maryland residents qualify for zero-premium health insurance but are not enrolled. More than 50,000 are eligible for Medicaid or the Children's Health Insurance Program. Nearly 80,000 qualify for private insurance that costs less than their federal premium tax credit plus, in some cases, their insurance responsibility payment. In effect, residents can turn their penalty payments into health insurance down payments, using their own money to help buy coverage for themselves and their families. The number of uninsured would decline by more than one-third, the individual market's risk pool would improve substantially, and premiums would decline below the levels otherwise charged. The remainder of this document answers frequently asked questions about aspects of the down payment plan, which has been introduced as SB 802 and HB 814.
User Submitted?: No
Authors: Dorn, Stan
Publisher: National Center for Coverage Innovation and Senior Fellow, Families USA
Data Collections: IPUMS USA
Topics: Health, Population Health and Health Systems
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