Individual Mandate Exemption Applications Lower Than Expected

Only about 77,000 families and individuals have sought an exemption from the Affordable Care Act's individual mandate, even though millions of people could qualify for one of the law's exemptions, according to an analysis of internal government documents obtained by the Washington Post.

Background on Exemptions

Various groups of people can apply for an exemption, including:

• Individuals belonging to certain religious organizations;
• Native Americans, who already have coverage under the Indian Health Service; and
• Undocumented immigrants (Somashekhar, Washington Post, 4/25).

In addition, the ACA as written included exemptions for U.S. residents who have suffered a hardship that makes them incapable of obtaining coverage under a qualified health plan. The Obama administration listed more than a dozen types of hardships, such as homelessness or having a low income in a state that declined to expand Medicaid under the law.

In 2013, HHS finalized that list before expanding it later in the year to include people whose insurance plans were canceled and could not find other coverage. The additional exemption meant that affected consumers would not be penalized if they remained uninsured throughout 2014.

Early last month, the administration quietly extended that exemption by two years, through 2016. The reprieve drew little immediate attention because HHS issued it as part of a separate ACA policy change (California Healthline, 3/14).

Details of ACA Exemption Estimates

According to the Post, Serco -- the company responsible for processing hardship exemptions for every state, except Connecticut -- reported receiving 76,859 exemption requests as of April 20. The company said it had processed around 26,000 of them, representing an estimated 43,699 individuals. None of the requests have been rejected.

Of the total number of exemption requests, 2,700 were related to hardship. Those requests will not be processed until federal officials provide guidance on how hardship exemptions are to be processed, according to the Post. On Friday, CMS officials said the agency is working with applicants to gauge if their circumstances would qualify for a different exemption category.

Most of the exemption requests Serco has received -- a little more than 32,000 -- are from members of American Indian or Alaska Native tribes. Jerilyn Church, CEO of the Great Plains Tribal Chairmen's Health Board, said that many Native Americans apply for exemptions because they can but end up enrolling in coverage through the ACA's exchanges because the private health plans typically provide better benefits.

The second biggest group that has received exemptions consists of members of groups with certain religious affiliations, including the Amish, Mennonite and Hutterite communities.

Individuals who would have become eligible for Medicaid if their home states opted to expand their programs under the ACA also are expected to make up a large proportion of those with exemptions. According to the Kaiser Family Foundation, 7.6 million residents would fall under that exemption category. 

According to Post, the government data it analyzed offer only an initial snapshot of exemption request trends, because individuals can apply for exemptions year-round. The administration has predicted that 12 million individuals will request exemptions in 2016 (Washington Post, 4/25).