House passes individual mandate exemption for co-op enrollees

Legislation shielding customers of failed Affordable Care Act (ACA) co-ops from penalties for not buying health coverage has passed the House, offering a slim exemption from one of the law’s signature components, the individual mandate.

Sponsored by Rep. Adrian Smith, R-Nebraska, the bill only waives the mandate for enrollees for the rest of a calendar year when a co-op shutters mid-year, as was the case in Oregon and Illinois. When his own state’s co-op closed in the first quarter of 2015, Smith said customers were worried about being penalized for not quickly purchasing another plan, even if they’re months away from Medicare eligibility or can afford to cover deductibles twice in the same year.

“This is a simple bill rooted in fairness,” Smith said in introducing the bill on the House floor.  “Americans who lost their health insurance through no fault of their own deserve certainty rather than having to take their chances within the federal bureaucracy to avoid paying a tax penalty. These consumers deserve time and flexibility to find a plan which works for their unique circumstances, especially when they face even fewer coverage options and possibly having to start over on their deductibles.”

The bill passed 258-165, with all Republicans and 16 Democrats supporting it. Several of those Democratic votes came from representatives of states where co-ops have either shut down or been under state control this year, such as Illinois Reps. Tammy Duckworth and Cheri Bustos, and Connecticut Rep. Scott Peters.

Legislators opposing the bill argued the exemption is unnecessary, since co-op enrollees are given a special enrollment period to purchase new coverage. One lawmaker, Rep. Jim McDermott, D-Washington, went as far as to accuse Republican of crying “crocodile tears” for co-op enrollees, according to The Hill, pointing to the lack of funding for the ACA’s risk corridor program to protect insurers from losses—which co-ops have blamed for their financial struggles.

Out of the 23 original co-ops, only six remain operational.

The exemption legislation faces tough odds of becoming law, as President Barack Obama has threatened to veto the bill and Congress will break after this week, not returning until after the election.