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What Is the Health Insurance Mandate?

Now that it has been backed by the Supreme Court, what is the individual mandate at the heart of President Barack Obama's health-care law?

A single payer supporter protests in front of the U.S. Supreme Court in Washington, DC. The Supreme Court is expected to hand down its ruling on the healthcare reform law today.
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A single payer supporter protests in front of the U.S. Supreme Court in Washington, DC. The Supreme Court is expected to hand down its ruling on the healthcare reform law today.

The individual mandate was the law's most contentious provision, requiring most Americans to obtain health coverage by 2014, when the legislation was due to take full effect. Those who do not comply would be forced to pay a financial penalty to be phased in through 2016.

In 2014, the penalty for individuals was set at $95, or 1 percent of taxable income, whichever was greater. By 2016, it was set at $695, or 2.5 percent of income. The law exempted illegal immigrants, the very poor, Native Americans, certain religious groups and prison inmates.

Republican-led states that have resisted creating health-insurance markets under the law would have to scramble to comply, but the U.S. would get closer to other economically advanced countries that guarantee medical care for their citizens.

The nation still faces huge problems with health-care costs, requiring major changes to Medicarethat neither party has explained squarely to voters.

Some backers of Obama's law acknowledge it was only a first installment: Get most people covered, then deal with the harder problem of costs.

During the arguments in March, conservatives on the bench questioned whether the government can force Americans to carry health insurance, wondering in arguments if Congress might next force people to buy broccolior burial insurance.

"If the government can do that, what else can it" do? asked Justice Antonin Scalia, referring to the individual mandate portion of the Patient Protection and Affordable Care Act.

Had the Supreme Court struck down the mandate, fewer people would have gotten covered, but the health-insurance industry would have avoided a dire financial hit.

Insurers would have been able to continue screening out people with a history of medical problems — diabetes patients or cancer survivors, for example. That would have prevented a sudden jump in premiums. But it would have left consumers with no assurance that they can get health insurance when they need it, which is a major problem that the law was intended to fix.

Obama administration lawyers said the insurance requirement went hand in hand with the coverage guarantee and cap on premiums, and they asked the court to get rid of both in the event it found the mandate to be unconstitutional.

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