The Congressional Budget Office estimated that 13 million people nationwide would become uninsured without the individual mandate. Some will choose to go without insurance or will not be able to find an affordable plan. Insurers could opt to leave local markets because they could not make money covering only sick patients.
Feldman said insurers and health care experts testified before the commission that Maryland’s insurance exchange would collapse in 2019 if the state didn’t act.
“Because of uncertainty at the federal level, it’s going to be up to states in this arena to pick up the slack and to enact legislation that responds to that uncertainty,” he said.
The federal mandate imposed a tax penalty on people who could afford to but chose not to buy insurance, depositing the money in a general Treasury fund.
In Maryland, the penalty fee will effectively be used, according to advocates, as a “down payment” on an insurance policy.
Beginning in 2020, if someone indicates on their taxes that they’re uninsured, the state would use the fine, plus any tax credits from the federal government, to buy an insurance plan for them.
Maryland would match its residents only with plans that cost nothing more than the fine plus the federal subsidy. So, if such a plan isn’t available in a person’s area, the state will hold on to the money in an interest-bearing account until the next open enrollment season. Then, the person has another chance to buy insurance. If at this time they don’t purchase a plan, the state will deposit the money into an insurance stabilization fund.