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Why does ACA's coverage requirement start in January?

4/28/2016 10:00:00 AM
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For many Americans, filing taxes on April 15th a couple weeks ago was the first they've heard of any requirements to buy health insurance. But here's the real kicker: if they didn't know until they got slammed with the tax penalty on April 15th, that means they will also get slammed with an even bigger tax penalty a year from now, because it is too late now to sign up for coverage for all of 2016. They learned this month that they will need to buy insurance in December in order to avoid a tax penalty in April of 2018, fully two years from now.

I get worried when our behavioral nudges require this much foresight and planning. This isn't a one-time start up issue. People are constantly dropping in and out of other kinds of coverage so every year you have a new batch of people who previously had insurance through their employer, for example, discovering for the first time that they need to buy individual coverage to comply with the law.

It doesn't have to be this way. Why not just make the coverage requirement period start in May and end the following April? That way people could sign up for coverage immediately upon discovering they owe a penalty for not doing so, thus sparing them from having a second year of penalties. I strongly suspect this would dramatically increase uptake on the exchanges, resulting in a healthier risk pool and decreasing insurance premiums for everyone.
Annie 5/05/2016 10:01:00 AM
Ask the feds to be rationale ..? I'm afraid that's not reasonable! But good post otherwise.