The Mandate: Health Insurance Premium at the Dining Room Table

Many Americans are about to celebrate the holidays with family and friends at the dining room table. At the same time, Congress may have eliminated the health insurance mandate as part of the tax bill. So how do you talk about health insurance at your dining room table?

At this Downton Abbey table, they’d never talk about it. But, we’ve made it easy to do so. ClareFolio produced “How to Talk Health Insurance at the Holiday Table.” It’s an app of sorts to help people understand the effect of changes to the Affordable Care Act (“Obamacare”) on health insurance premium.

Obamacare is a health insurance program, and every program has rules. It “mandates” most Americans to be covered; if you aren’t (and don’t qualify for an exception), then you pay a penalty. But some people don’t like this rule. What might happen to health insurance premium if Congress changes the rule and eliminates the mandate?

Assume we have 10 people at our table. Nine persons are healthy and spend $1,000 per year on health care. One person is unhealthy and spends $100,000 per year. Let’s do four different scenarios, which are also illustrated in our “Dinner Table Video” (https://vimeo.com/192719323) *:

Scenario 1: Everyone has to participate (as in the current mandate). If you do the math, their annual insurance premium is about $11,000 per person.

Scenario 2: People can choose to be there (as in the mandate is eliminated). If four healthy people leave the table, five healthy and one unhealthy people are left at the table. They now pay $17,500 per year.

Scenario 3: People with pre-existing conditions are excluded. By removing the unhealthy person from the table, the remaining five healthy people pay $1,000 per year.

Scenario 4: One of the five persons still at the table becomes unhealthy; he’s already at the table so he gets to stay. Everyone’s insurance premium increases to $21,000.

People who are not at the table are no longer insured. They pay for their own health care, including $100,000 for the one unhealthy person.

But you have your own holiday table and get to set your own rules. Would you keep the mandate? Or eliminate it? Spend a minute and do you own math. Go to https://clarefolio.com/calc/.

And, of course, best wishes for a happy holiday!

*How to Talk Health Insurance at the Holiday Table (November 23, 2016)