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Individual Mandate More Like Suggested Donation

Philip Betbeze, for HealthLeaders Media, February 1, 2013

Not the IRS, which has already told Congress that it won't enforce the collection of the, ahem, "shared responsibility payment" for people who violate the requirement that they obtain health insurance. (I thought the Supreme Court had already gotten the administration to admit that the penalty, or "shared responsibility payment" is a tax, but I guess that's another story).

It's unclear at this time, but it's reasonable to project that because the state exchanges will be supported by the government through subsidies and coupled with a Medicaid expansion, that payer rates may not be generous.

Medicaid (already known as one of the stingiest payers for hospitals and health systems) is already a challenge for hospitals who charge that it doesn't come close to paying for the cost of treating its beneficiaries. The fact that penalties paid by those who ignore the individual mandate are likely to be minuscule doesn't help the economics of the ACA.

Despite the apparent pointlessness of the new rules given the ultimately tiny percentage of taxpayers who will find it possible to actually violate them, it's clear that what the Obama administration is planning on enacting is far from a real individual mandate. It's also neither a tax nor even a "shared responsibility payment," whatever that means.

In practice, it seems it will be more of a "suggested donation."


Philip Betbeze is senior leadership editor with HealthLeaders Media.
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2 comments on "Individual Mandate More Like Suggested Donation"


Todd Madden (2/2/2013 at 9:57 AM)
Given the low reimbursement somehow state hospital associations are aggressively campaigning for states to expand Medicaid claiming it will reduce the cost shift! So let me get this straight, if a state expands Medicaid (subsidizing something encourages more utilization), but there are still significant uninsureds and more people turning 65 and no significant increase in primary care providers, that somehow there will be less cross subsidization? Seems like a recipe for more ER visits not less.

alex eaton (2/1/2013 at 2:55 PM)
IRS to accept "suggested donations" the notion offends me.