The new state health insurance mandates – why this is the most important financial planning issue today

So far three states – New Jersey, Massachusetts and Vermont – have passed laws that add a health insurance mandate with tax penalty for not having coverage. The new laws kick in when the federal insurance mandate law expires in 2019. Other states are considering similar laws.

Some things are not clear yet:

– what impact recent federal government action will have on availability of health coverage for individuals in states without a coverage mandate and guaranteed issue coverage.

– whether Pennsylvania and Delaware (my other primary areas of practice) will pass an individual health insurance mandate.

– whether the US Justice Department’s newly publicized opinion that the individual insurance mandate is unconstitutional applies only to its interpretation of federal law or whether this same logic applies to state law. (Most suspect this is an opinion that will not be sustained in court).

What I do know:

State insurance mandate laws governed the health insurance marketplace in the years before ACA.

In all cases the health insurance mandate is coupled with the guarantee of available coverage. Without the first, we will not see the second.

This is far more than a tax issue. This is a life and death matter for some people. It is a financial security matter for millions more. This is a matter of governments exerting direct and ultimate control over our lives.

People who do not have access to health coverage eventually find their lives altered to the point where little else matters. This must be the single largest consideration in the financial planning process.

I was one of the relatively few people licensed in all 50 states to provide comparative advice from the 1990s until 2010 when ACA was passed.

Associates recently encouraged me to invest in rebuilding this capacity. It is roughly a $5,000 business gamble. I will take the risk if I can arrange the funding.

Joe Biden was right when he said to the President in 2010 about the passage of health reform “This is a big fucking deal!”. Unwinding the law is an equally big deal.


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