Law imposes fines for not having "adequate" health insurance
The Boston Herald reports that in 2009, between 46,000 and 49,000 Massachusetts residents were fined under that state's Romneycare law for not having health insurance, or for having a policy that did not include all the mandated coverages imposed by that law. The federal Obamacare care law is modeled on Romneycare, including its “individual mandate" that every person must have or purchase a health insurance policy meeting its requirements.
If Obamacare’s individual insurance mandate is upheld by the U.S. Supreme Court and the law is not repealed, each year around 70,000 Michigan residents would be subject to penalties for not having the prescribed insurance, assuming a similar rate of "non-compliance" and this state’s larger population.
A similar comparison based on the Massachusetts experience suggests that if Obamacare had been in effect here, it would have meant 27,776 fewer jobs in Michigan last year. Due to other differences between the two states and the two laws, both the job loss and individual mandate penalty enforcement figures are only very rough estimates of what Michigan can expect.
A separate column in the Boston Herald describes the plight of one struggling family that was fined $3,000 because their insurance policy did not include all the particular mandates imposed by the law. Lauren and Nick Destito, both aged 50, had been paying $750 each month for their health coverage. "(We) did make the effort and purchased a plan," Lauren told a state hearings officer. "I don’t understand why we’re in this situation at all.”
The regulator responded that the amount of coverage each family is required to pay for is established “not, unfortunately, from your perspective but from the state agency’s view.”
The federal Patient Protection and Affordable Care Act authorizes penalties for failing to comply with its individual mandate of $695 per person or 2.5 percent of household income (after some adjustments), whichever is greater. The law will be administered in each state by a state or federal agency called an “exchange.” These exchanges will necessarily play a major role in determining which families are subject to the individual mandate’s penalties.
Michigan’s Legislature is currently debating whether to create such a state agency, and if so whether to create it now or only after the U.S. Supreme Court rules in June, and if the law is not invalidated, after the verdict of the 2012 presidential election. The Legislature may also vote in the next few weeks on a bill to spend $10 million in federal subsidies to start creating a state PPACA administration agency (the "exchange").