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What Is the Individual Mandate?


Updated August 20, 2013

What Is the Individual Mandate?
image ©iStockphoto/Tim McCaig

The individual mandate orders all citizens and legal residents of the United States to have health insurance by January 1, 2014. People who don’t have health insurance or a government health plan like Medicare or Medicaid must get health insurance or pay a penalty tax called the shared responsibility payment.



A controversial part of the Affordable Care Act, individual mandate opponents argued that the government shouldn’t be allowed to penalize people for not buying something. Challenges to the constitutionality of the individual mandate went all the way to the Supreme Court.

The Supreme Court decided the penalty imposed by the individual mandate was actually a tax on people who go without health insurance. Since the government has the right to tax its citizens, the Supreme Court decided the individual mandate was constitutional.

How Does the Individual Mandate Work?

Some people are exempt from the individual mandate, but the majority of Americans fall under its mandate and are subject to its penalty. People who remain uninsured but aren't exempt have to pay the shared responsibility payment when they file their federal income taxes.

In order to help people comply with the individual mandate, the Affordable Care Act required the creation of health insurance exchanges, or marketplaces, where people can buy health insurance. It provided for subsidies and tax credits to make health insurance more affordable for people of modest means. Additionally, it expanded the Medicaid program in some states to cover more of the lowest income people with government-funded health insurance.

How Much Is the Health Insurance Penalty for an Individual?” shows how to calculate your penalty for being uninsured.This allows you to predict what you’ll owe as your lifestyle and financial situation change. "How Much Is the Health Insurance Penalty for Families?" explains how to calculate the shared responsibility payment for a family.

To learn how the individual mandate may affect you, read “The Health Insurance Mandate.”

Also Known As: health insurance mandate, coverage mandate, individual shared responsibility

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