The District of Columbia’s Coverage Requirement Is Caught in Congressional Crosshairs, and Consumers Could Pay the Price

When Congress repealed the individual mandate’s financial penalty, some states acted quickly to protect their markets from deterioration. A handful of state legislatures and the Council of the District of Columbia considered or enacted legislation creating a state-based coverage requirement. While many states faced political hurdles and unforgiving timelines in enacting their own mandates, D.C. now has an additional obstacle: the U.S. Congress.

When Congress struck a major provision of the ACA, D.C. acted to protect consumers

With the ACA’s coverage requirement effectively neutered for next year, D.C. Mayor Muriel Bowser directed the D.C. Health Benefit Exchange Authority to form an ACA working group that makes recommendations on how the District can protect historic coverage gains and ensure that consumers have access to comprehensive, affordable health insurance. The group of experts* designed a District-level coverage requirement that largely mirrors the federal requirement, with tweaks that tailor it to D.C.’s particular insurance environment and respond to recent federal policy changes. Last week, Mayor Bowser signed the requirement into law.

By encouraging healthy consumers to enroll, D.C.’s coverage requirement would encourage market stability and drive down premiums; new estimates from the Urban Institute project that a D.C. individual mandate would reduce premiums on the individual market by 16 percent. In New Jersey, another state that passed an individual mandate going into effect next year, average rates would have more than doubled in 2019 if the state had not implemented a coverage requirement.

Congress Could Block D.C.’s Coverage Requirement

While other states need only wait for a governor’s signature after a bill is passed, D.C. has another hoop to jump through. As a federal district, D.C. is subject to oversight by Congress, which has the authority to overrule laws already enacted by the D.C. Council and to preemptively block pending and future legislation. In July, the U.S. House of Representatives inserted riders into a federal spending bill to inhibit D.C. from implementing or enforcing its coverage requirement. If the riders make it through the budget process and are signed into federal law, D.C. will be unable to implement its coverage requirement.

Congressional intervention could cause major disruption in D.C.’s market. Insurers in D.C. have already proposed 2019 rates assuming that District residents would be required to maintain coverage and the risk pool would remain stable. If Congress blocks the coverage requirement from taking effect, insurers will likely have to increase their premiums – by an estimated 16 percent – to account for a smaller, sicker risk pool than originally expected.

*CHIR faculty member Dania Palanker served on this working group.

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