If you haven’t already done so I highly recommend you read our earlier story about Paul Ryan’s Obamacare 2.0 to get a rundown on the bill and what it does in its current form. You can read the bill (American Healthcare Act) by clicking here.
One of the most prominent narratives Ryan’s PR branch is spreading is that his Obamacare 2.0 repeals the mandate in the ACA. This is a PR battle they hope to win on a technicality. Because technically speaking there wasn’t a mandate in the ACA (Original Obamacare) and there isn’t one in Ryan’s AHA (Obamacare 2.0).
But realistically speaking, there is a hefty financial penalty written into both.
In Obamacare you could choose not to carry coverage. But in doing so you would be penalized with a tax. This is where it was labeled a mandate.
So if in Obamacare the mandate was supported by a financial penalty, which is the case, then the same can be said for Paul Ryan’s Obamacare 2.0.
What AHA does is remove the direct tax penalty and puts the penalty on the backend in a different form. Yes, you can choose not to carry coverage. If you’re a healthy 27 year old with no need for expensive premiums, for example, you can opt to not carry coverage. But in such a scenario the only way to avoid a financial penalty is to never again purchase health insurance.
What the AHA does is it levels a penalty of 30% of monthly premiums paid directly to insurance companies the day you decide to begin carrying coverage. So if on your 30th birthday you decide it’s a good idea to obtain health insurance and your premium is, say, $400 a month, the monthly penalty would be $120. Or $1,440 for the first year of newly acquired coverage.
In both scenarios you can choose not to carry coverage. But in both scenarios there is a financial penalty for doing so. Unless, of course, you never have health insurance for the remainder of your life.