Legislation Introduced to Save Americans With No Insurers on Exchanges From Tax Penalties

If Anthem exits, some areas will have no insurers operating on exchanges

Senators Lamar Alexander (R., Tenn.) and Bob Corker (R., Tenn.) / Getty Images
April 2, 2017

Senators Lamar Alexander (R., Tenn.) and Bob Corker (R., Tenn.) have introduced the Health Care Options Act of 2017, which would save Americans from penalties for not having health insurance when no insurers operating on the exchanges in their areas.

Currently, the Affordable Care Act's individual mandate requires that individuals purchase health insurance or they will be forced to pay a penalty of $695 to the Internal Revenue Service for not having it. This mandate was designed so that younger, healthier enrollees would sign up for coverage,  balancing the risk pool and compensating for sicker enrollees that signed up.

Major health insurers like UnitedHealth, Aetna, BlueCross Blue Shield, and Humana began announcing they were exiting the Obamacare exchanges last year, citing major losses due to a sicker risk pool.

Now, one-third of the counties in the United States will only have one insurer offering coverage on the Obamacare exchanges this year. Yesterday, analysts said that Anthem may exit Obamacare in 2018, which would leave some areas in Colorado, Kentucky, Missouri, and Ohio with no insurer.

This means that some Americans living in these areas would still be obligated to purchase coverage under Obamacare's individual mandate even though there is no insurance offered on the exchanges. The senators' proposed bill would attempt to provide relief to these Americans by waiving the penalty in these cases.

The bill would also allow Americans who live in these areas to purchase any health insurance plan outside of the exchanges, if the plan lives up to their particular state's standards for individual market approval.

"This legislation would help those in Knoxville and across the country by allowing any American who receives a subsidy and has no insurance available on the exchange next year to use that subsidy to buy any state-approved insurance off of the exchange," said Sen. Alexander. "Second, the bill would waive the Affordable Care Act requirement that these Americans, who have zero insurance options with their subsidies, have to pay a penalty for not purchasing insurance."

"This legislation will help bring peace of mind between now and the beginning of next year to millions of Americans, some of the most vulnerable people in the country, who face having zero options of health insurance to purchase with their subsidy," he said.