FAQ

What is the penalty for not having medical insurance

q. Is there still a penalty for not having insurance?

a. When the Affordable Care Act was written, lawmakers knew it would be essential for healthy people to sign up for coverage, since insurance only works if there are enough low-cost enrollees to balance the sickest enrollees and higher cost. so the law included an individual mandate, also known as the shared responsibility provision.

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This controversial provision stipulated that individuals who did not have minimum essential coverage would be subject to a tax penalty unless they were exempt from the shared responsibility provision.

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but that tax penalty was removed after the end of 2018, under the terms of the Tax Cuts and Jobs Act of 2017. technically, the individual mandate itself is still in place, but there is no longer a penalty to enforce it .

(The continued existence of the mandate, but without the penalty, is the crux of the California v. Texas lawsuit, in which 18 states challenge the constitutionality of the mandate without the penalty and argue that the entire ACA should be struck down if the mandate is unconstitutional. a judge ruled in december 2018 that the aca should be struck down, and the trump administration agrees. the case was appealed to the fifth circuit and oral arguments were heard in july 2019. the ruling was issued in late 2019, essentially just kicking the can down the road: the appellate court panel agreed with the lower court that the individual mandate is unconstitutional, but sent the case back to the lower court to determine what aspects of the aca should be overturned by the supreme court in the fall of 2020, with a ruling expected in the spring of 2021. but with the biden administration and a very thin democrat majority in congress, it may be possible to do er that the case is moot before the ruling is issued).

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dc, massachusetts, new jersey, california and rhode island have penalties for not having insurance

Although the irs is not penalizing people who are uninsured in 2019 and beyond, states still have the option to do so. a handful of states have their own individual mandates and penalties for noncompliance:

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