On December 20, 2017, Congress passed a massive tax bill, the Tax Cuts and Jobs Act, that will impact nearly every individual and business in America. While the bill makes sweeping revisions to existing tax provisions, it will also largely impact the health industry.
Individual Mandate Repealed
The bill repeals the individual mandate established in 2005 by the Affordable Care Act (ACA) by eliminating the penalty for failure to maintain health insurance coverage.
Under the ACA, the individual mandate requires Americans to carry a minimum level of health coverage unless they qualify for a hardship exemption. Failure to maintain coverage would result in a monetary penalty. The purpose of this mandate was to widen the insurance pools to establish a more representative class of insured, which includes young, old, healthy, and sick individuals. Widening the pool was intended to reduce premiums through the idea that more people would be paying for coverage (instead of people enrolling only due to an illness and cancelling coverage once it was no longer needed), thereby reducing the overall cost of insurance.