Blog: The New District of Columbia Policy to Protect Insurance Coverage

The District of Columbia recently took an important step to protect health insurance coverage by creating a District-specific health insurance requirement. This is in response to the unexpected termination of the federal health insurance requirement, which Congress narrowly passed last December. The Affordable Care Act had required that federal taxpayers, except some with low incomes, to have health insurance or pay a federal income tax penalty. The underlying logic was that this would incentivize more people to get coverage and prevent insurance premiums from rising for the great majority who have or purchase health insurance. The concept was equivalent to mandatory auto insurance, which is required in most states. After many unsuccessful attempts last year to repeal and replace the ACA, Congress effectively cancelled the individual requirement as a last minute change to December 2017’s Tax Cut and Jobs Act. The federal termination goes into effect in January 2019. Analyses by groups such as the Congressional Budget Office found that the cancellation would increase the number of uninsured Americans by a few million.The District of Columbia has joined a handful of states (Massachusetts, New Jersey and Vermont) that have a local health insurance requirement instead of the cancelled federal policy, creating a similar requirement that applies to District residents. As a member of the Executive Board of the District’s Health Benefit Exchange Authority, I had the responsibility of chairing a working group of District residents and stakeholders in reviewing these policies and recommending changes to District law. After numerous public meetings, we recommended a policy to maintain health insurance incentives for DC residents. This recommendation was endorsed by the full board, proposed by Mayor Bowser and adopted by the DC City Council on June 26th as part of the 2018 Budget Support Act. The new policy is designed to maintain the District’s success in supporting affordable insurance coverage. Because of the District’s strong health policies and marketplace, fewer than 4 percent of DC residents are uninsured, among the lowest rates in the nation. The new DC policy would pick up just when the federal policy expires. In 2019, DC residents who do not have or have not purchased health insurance would have to pay an amount equal to the federal tax penalty. Only it would now be assessed as part of the DC income tax, instead of the federal tax. No one would pay more than they would pay under the current federal requirements. Because almost all DC residents have health insurance coverage, most people will be unaffected by the change. The DC policy exempts low-income people who are eligible for Medicaid or similar local health insurance programs from the tax penalty. The revenue collected under this policy will be reinvested to support health insurance outreach and affordability. This policy, complemented by Virginia’s recent law to expand Medicaid coverage, demonstrates the continued will in the Mid-Atlantic region to support access to affordable health care. Progress is possible, despite the barriers and challenges that have been mounted by the President and Congress in the past year.