Republican Leadership Considers Removing ‘Premium Surcharge’ Mandate in Healthcare Replacement Bill

Ryan-Bill-J. Scott Applewhite:AP
J. Scott Applewhite/AP

The GOP leadership might consider removing the 30 percent premium surcharge for those who go without insurance in the bill to repeal and replace Obamacare, according to a senior GOP staffer.

Speaker Ryan’s bill, often referred to as RyanCare, would impose a 30 percent premium surcharge on those who forego insurance for longer than three months. Conservatives have panned this surcharge as creating another individual mandate penalty.

The Congressional Budget Office analysis reports that Speaker Ryan’s Obamacare repeal bill forces one million people to purchase health insurance or pay the bill’s insurance premium surcharge.

Avalere Health reported that because health insurance premiums adjust based on age, Ryan’s health penalties would be cheaper for younger Americans, and more expensive for older Americans.

Avalere’s report states that “A 50-year-old individual at 100% of the federal poverty level ($11,880 in income for 2016) could pay over $1,000 more in penalties under AHCA for not having insurance in the prior year than what she would pay for not having insurance under the current law. Finally, unlike the ACA individual mandate penalty, the AHCA’s penalties are not prorated based on how long someone is uninsured, so penalty increases are higher for those who have shorter gaps in coverage.”

Caroline Pearson, senior vice president at Avalere, said, “The continuous coverage penalty functions much like today’s individual mandate, but it increases penalties for lower-income and older individuals, and it reduces penalties for younger and wealthier people.”