Sens. Cotton and Toomey: End ObamaCare's individual mandate -- it's cruel and pointless

It’s unfortunate and profoundly disappointing Congress proved itself incapable of repealing and replacing ObamaCare. But for lower-income Americans who feel the pain of this law each day, that’s all the more reason for Congress to exempt them from one of ObamaCare’s cruelest provisions: the individual mandate.

Intended to force “young invincibles” to buy insurance, in practice, the mandate has forced millions of people to get by with even less. Currently, the law requires every working-age American to buy health insurance—or pay a penalty equal to 2.5 percent of household income or about $700, whichever is greater.

The majority of well-off families get insurance through their employer, so for them, the mandate is irrelevant.

The mandate is simply a tax on Americans who can’t afford insurance. This is a moral outrage, and the public agrees: 66 percent of Americans oppose the mandate, according to a 2017 YouGov poll.

But for those who must buy coverage on ObamaCare’s exchanges—where premiums have doubled since the law’s passage—the mandate penalty ends up being a bargain.

Consider: For a 30-year-old, the average premium for the least generous “bronze” plan on an ObamaCare exchange is $311 per month while the average deductible is a whopping $6,092 per year. In other words, he or she will have to spend close to $10,000—$4,000 a year just for the privilege of having insurance and an additional $6,000—before coverage even kicks in.

There’s not much competition to drive down prices. In almost half of all counties in the United States, only one insurer offers plans on the exchanges; what you see is what you’re stuck with. This is not a phenomenon that is, as some have suggested, isolated to rural counties. The five counties that make up the Philadelphia metro area are served by only one insurance company on the exchange.

The choice facing these Americans is clear—either pay thousands of dollars for overpriced insurance or pay significantly less for nothing at all.

Faced with this “choice,” almost 6.7 million households were forced to pay the penalty last year.

What’s especially cruel is that the mandate falls mostly on those who can least afford it. Nearly 80 percent of Americans who paid the penalty last year made less than $50,000. Even worse, tens of thousands of them earned less than $10,000.

The mandate is simply a tax on Americans who can’t afford insurance. This is a moral outrage, and the public agrees: 66 percent of Americans oppose the mandate, according to a 2017 YouGov poll.

The mandate’s few defenders say it is necessary to keep insurance viable and that without it, Americans won’t buy insurance until they get sick, causing a death spiral as fewer healthy people contribute to the pool and more sick people draw from it.

Let’s look at the facts.

In 2010, when ObamaCare became law, the Congressional Budget Office estimated that 21 million people would enroll in the exchanges—largely due to the mandate. In reality, less than half the original projection—10.4 million—signed up despite the fact that the prior administration doubled its advertising budget to encourage people to enroll. Even one of ObamaCare’s chief architects, Jonathan Gruber, admitted in a recent study published in the New England Journal of Medicine that the mandate has had little impact on overall coverage rates.

The mandate has fallen far short of expectations while hurting the working poor more than it is helping them.

This is why we have introduced legislation to give millions of Americans much-needed relief.

Our bill, the Mandate Relief Act, would exempt any American from the individual mandate if he or she falls into one of three categories: he or she earns less than the national median household income, which today is $59,039; fewer than two insurers offer plans on the local exchange; or his or her state’s average premiums have increased in the last year by at least ten percent. It also would lift ObamaCare’s restrictions on health savings accounts to make it easier for working families to meet their out-of-pocket costs.

Our bill is something both parties can rally around. It provides timely, targeted relief to the working class, and it doesn’t dismantle ObamaCare. We have both heard personally from our constituents in Arkansas and Pennsylvania who have suffered needlessly under the penalty. It is time we relieved them of this cruel, pointless mandate.

Republican Tom Cotton represents Arkansas in the United States Senate.

Senator Pat Toomey was elected to the U.S. Senate from Pennsylvania on a platform of limited government, economic and job growth, and restoring fiscal responsibility.