OPINION: Why I voted to repeal health care insurance tax penalty
I have always supported the freedom to choose. I believe that the federal government should not force anyone to buy something they do not wish to buy, in order to avoid being taxed. That is the fundamental reason why I opposed the Affordable Care Act from its inception, and also why I cosponsored a bill to repeal the individual mandate tax penalty starting as early as 2018. And that is why I support the repeal of that tax today.
Over the course of this year, the Senate has considered bills that would have repealed Medicaid expansion, completely transformed the base Medicaid program, converted the individual exchanges into a block grant program, cut Planned Parenthood out of Medicaid reimbursement for a year, and other measures. All of those bills went far beyond the fundamental problems presented by the ACA, and would have unnecessarily taken away access to care from those who need it most.
The ACA has helped many people in our state, and across the country. There is no question about that. Some people have been able to buy insurance for the first time in their life, mental health and substance abuse coverage is more accessible now, and insurers cannot arbitrarily deny coverage to those with pre-existing conditions. I do not support taking care away from these people, but there are many for whom this law has not helped. It is important to emphasize that eliminating this tax penalty does not take care away from anyone. Instead, it provides important relief to those who have been penalized for choosing not to buy unaffordable insurance.
Alaskans pay the highest price for premiums in the country; that is why the number of people enrolled on the exchange in Alaska has shrunk every year since the ACA was passed. People have been forced out of the market by the high cost of insurance, with some often forced to pay a tax because the price of insurance was too high for them to afford.
A silver plan for a family of four, with a $9,000 deductible, will cost about $2,160 per month in 2018. If this family does not qualify for the advanced premium tax credits, they face the choice of paying almost $35,000 in 2018 just for health insurance premiums, before their insurance really kicks in, or potentially paying a tax of $695 or 2.5% of their income. An individual could be paying around $709 per month for a plan with a $3,000 deductible. With no tax credits, that person would pay over $11,500 per year before insurance starts to help, or pay the tax for not having coverage.
Alaskans paid over $9 million to the IRS under this penalty in 2014, and over $12 million in 2015. There are Alaskans making the calculated risk to go without insurance and pay the tax. They prefer to take a gamble, pay for care out of pocket, and hope nothing too bad happens because the insurance available to purchase is unaffordable. Eliminating this tax would allow Alaskans to have greater control over their money and health care decisions.
Repealing the individual mandate simply restores to people the freedom to choose. Nothing else about the structure of the ACA would be changed. If you currently get tax credits to help pay for your insurance, you could still receive those credits if you choose to buy an exchange plan. If you are enrolled in Medicaid, or received coverage under Medicaid expansion, you could still be enrolled if you choose to be. The only difference would be that if you choose to not buy health insurance, the government would not levy a tax on you.
Protecting the gains we've made with provisions of the ACA, while providing greater control to states and options for individuals is why I have been working for bipartisan solutions to the health care challenges we face.
Instead of taxing people for not being able to afford coverage, we should be working to reduce costs and provide options. That is precisely what the bipartisan legislation introduced by Sen. Lamar Alexander, R-Tenn., and Sen. Patty Murray, D-Wash., which I have cosponsored, achieves. While I support repealing the individual mandate, I strongly support enacting the bipartisan compromise Alexander/Murray into law as fast as possible to stabilize our markets, provide more control to states and more choices to individuals.
Alaska Sen. Lisa Murkowski has served in the U.S. Senate since 2002.