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'The First Crack in the Individual Mandate'

7:27 AM, Dec 20, 2013 • By DANIEL HALPER
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Blogger Ezra Klein calls the sudden Obamacare rule change "the first crack in the individual mandate."

"This puts the first crack in the individual mandate. The question is whether it's the last. If Democratic members of Congress see this as solving their political problem with people whose plans have been canceled, it could help them stand against Republican efforts to delay the individual mandate. But if congressional Democrats use this ruling as an excuse to delay or otherwise de-fang the individual mandate for anyone who doesn't want to pay for insurance under Obamacare, then it'll be a very big problem for the law," writes Klein.

And here's how Klein explains the basic rule change:

1. The individual mandate includes a "hardship exemption." People who qualify can either ignore the individual mandate altogether or purchase a cheap, bare-bones catastrophic insurance plan that's typically only available to people under 30.

2. According to HHS, the exemption covers people who "experienced financial or domestic circumstances, including an unexpected natural or human-caused event, such that he or she had a significant, unexpected increase in essential expenses that prevented him or her from obtaining coverage under a qualified health plan."

3. Today, the administration agreed with a group of senators, led by Mark Warner of Virginia, who argued that having your insurance plan canceled counted as "an unexpected natural or human-caused event." For these people, in other words, Obamacare itself is the hardship. You can read HHS Secretary Kathleen Sebelius' full letter here. HHS's formal guidance is here.

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