New Jersey First to Reinstate Individual Mandate for Health Insurance

Health Insurance

May 1, 2018

New Jersey has become the first state to impose its own requirement for healthcare coverage after the individual mandate was repealed at the federal level late last year. On Friday, April 13, the Garden State voted 23-13 in the state Senate and 50-23 in the state Assembly to reinstate the unpopular provision of the Affordable Care Act. Known as the individual mandate, the requirement imposes a fine on anyone who doesn’t carry comprehensive health insurance that covers essential benefits. The mandate was repealed in December 2017 as part of the sweeping tax bill signed into law by President Trump.

The New Jersey mandate bill will now be sent to Gov. Phil Murphy. If signed into law, the legislation would require New Jerseyans to get health insurance or pay a fine. In 2018, the fine for not having health insurance is $695 per adult and $347.50 per person, per household, or a flat 2.5 percent of a household’s taxable income, whichever is greater.

New Jersey lawmakers are hoping to stabilize the insurance market in that state. According to some, eliminating the individual mandate could encourage young, healthy consumers to drop their health plans or avoid signing up altogether. Insurance risk pools depend on this demographic to offset the higher cost of care for sicker populations.

One poll found that most New Jersey residents do not support reinstating the individual mandate. Nationwide, the mandate has been a consistently unpopular provision of Obamacare since it was signed into law eight years ago. But health experts and lawmakers fear an unstable market, which could dissuade insurers from participating in exchanges and boost premium rates even higher. According to a report from the California insurance marketplace, New Jerseyans could face premium hikes of over 90 percent in the next three years without stabilization efforts. California is another state considering reinstating an individual mandate, as is Maryland.

The Trump administration repealed the individual mandate nationwide starting in 2019, but the requirement still exists for this year. A recent rule change from the Centers for Medicare and Medicaid Services allows two additional exemptions from the mandate for people who oppose abortion and those who live in areas with only one carrier option on the exchange. In New Jersey, about 275,000 people depend on the Obamacare exchange for health insurance. Most qualify for tax credits to reduce monthly premiums.