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Senate GOP Adds New Penalty for Uninsured to Health Care Bill

Senate Republicans updated their health bill with a major provision that requires people to maintain coverage or become barred from insurance for six months.
Image: Mitch McConnell
Senate Majority Leader Republican Mitch McConnell (C) speaks during a news conference beside fellow Republican Senators John Barrasso (L) of Wyoming, John Thune (Back) of South Dakota and John Cornyn (R) of Texas, on Capitol Hill on May 9, 2017 in Washington. FileMichael Reynolds / EPA

WASHINGTON — Senate Republicans made a significant change to their health care plan on Monday, adding a provision that requires people to maintain coverage or be barred from buying insurance for six months.

The late addition effectively serves as a replacement for the Affordable Care Act’s individual mandate, which requires people to maintain insurance coverage or pay a financial penalty. It applies to people who have a gap of coverage of more than 63 days.

Health policy experts across the political spectrum had warned that the initial Senate bill’s failure to include some penalty for going uninsured could cause a “death spiral” in which people go without health insurance while healthy and only buy it when they become sick. In that scenario, insurance premiums shoot up for everyone as insurance markets become flooded with customers who disproportionately require expensive treatments.

Related: CBO Estimates 22M More Uninsured Under Senate Health Care Bill

Under current law, most customers can only buy insurance on the individual market during an annual open enrollment period or if they experience a major life event, like losing a job or getting divorced. But the Senate provision would go further, barring people from buying insurance that takes effect for six months even during open enrollment if they fail to meet its requirements.

Senate Republican leaders plan to hold a vote on the bill, which would reshape the health care system and affect tens of millions of people, later this week. At least five GOP senators have expressed reservations about the bill as it is currently written and leadership needs the support of at least 50 of the 52 GOP senators to pass it.

The nonpartisan Congressional Budget Office released an analysis of the bill's effects on coverage, premiums, deductibles, and spending on Monday afternoon, estimating that 22 million more people would be uninsured in a decade than under Obamacare.