The original version of the Affordable Care Act mandated a requirement for every individual to have health insurance. However, Republican lawmakers opposed the individual mandate. After the election of President Donald Trump, the Tax Cuts and Jobs Act was signed into law which eliminated the individual mandate. So the individual mandate to have health insurance is no longer in effect in most states. There is a short list of states that still require you to have health insurance.
Which states have an individual mandate?
In 2020 there are five states with individual mandates:
- New Jersey
- Rhode Island
Additionally, Vermont passed an individual mandate but there is currently no financial penalty attached to it for 2020.
Living in any of the above states means you must have health insurance coverage in 2020. If you do not, you may have to pay a fine to the state.
Why have an individual Mandate?
These states have an individual mandate for the same reason the ACA originally did. Without the mandate, people would only buy insurance when they knew they needed it like the elderly and people with existing health conditions.
The people that would buy health insurance before ACA would normally be the most expensive to insure. So insurance companies were able to deny coverage outright or charge someone much more for their coverage. But with ACA and the individual mandate, there was no incentive for even healthy people to have insurance. The individual mandate along with prohibiting the discrimination against anyone that would need health insurance in turn made health insurance more affordable for everyone. So the biggest reason for these states to have an individual mandate is for the majority of people to have a cheaper premium to pay for their insurance.
For more information on insurance plans look here.