House Majority Leader Kevin McCarthy and House Speaker Paul Ryan (AP Photo/J. Scott Applewhite)

(CNSNews.com) - The plan to repeal and replace Obamacare unveiled by House Republican leaders on Monday orders insurance companies to charge people 30 percent more in premiums for a full year if they did not have insurance for 63 days or more in the previous year.

The sections of the Republican bill that create this mandate on insurance companies are titled: “Continuous Health Insurance Coverage Incentive,” and “Encouraging Continuous Health Insurance Coverage.”

The first subsection of the “Encouraging Continuous Health Insurance Coverage” section is entitled: “Penalty Applied.”

This subsection says insurance companies “shall” impose the penalty.

“[A] health insurance issuer offering health insurance coverage in the individual or small group market shall, in the case of an individual who is an applicable policyholder of such coverage…increase the monthly premium rate otherwise applicable to such individual for such coverage during each month of such period, by an amount determined under paragraph (2),” says the bill.

Paragraph 2 goes on to explain that the “increase” in premiums the government will require is 30 percent over the normal premium for the plan.

“The amount determined under this paragraph for an applicable policyholder…is the amount that is equal to 30 percent of the monthly premium rate otherwise applicable to such applicable policyholder for such coverage during such month,” the Republican bill says.

The proposed legislation goes on to say that the burden of proof will be with the individual American seeking to buy health insurance. If they cannot document that they did not have a 63-day lapse in insurance during the previous year, they must pay the 30-percent penalty.

The person who must pay the penalty, the bill says, is “an individual who…cannot demonstrate (through presentation of certifications described in section 2704(e) or in such manner as may be specified in regulations, such as a return, or a statement made under section 6055(d) or 36C of the Internal Revenue Code of 1986), during the look-back period that with respect to such enrollment period, there was not a period of at least 63 continuous days during which the individual did not have creditable coverage.”

The penalty also will be assessed against young people who age out of their parents’ plans and do not sign up for their own insurance in the next open enrollment period.

It will apply, the Republican bill says, “in the case of an individual who had been enrolled under dependent coverage…and such dependent coverage of such individual ceased because of the age of such individual, is not enrolling during the first open enrollment period following the date on which such coverage ceased.”

The summary of the proposal published by the House Energy and Commerce Committee also points to this 30-percent increase in insurance premiums that the government will order insurance companies to impose on people who failed to buy insurance for 63 days.

“Beginning in open enrollment for benefit year 2019, there will be a 12-month lookback period to determine if the applicant went longer than 63 days without continuous health insurance coverage,” says the summary.

“If the applicant had a lapse in coverage for greater than 63 days, issuers will assess a flat 30 percent late-enrollment surcharge on top of their base premium based on their decision to forgo coverage,” says the summary. “This late-enrollment surcharge would be the same for all market entrants, regardless of health status, and discontinued after 12 months, incentivizing enrollees to remain covered.”

At the same time, the House Ways and Means Committee’s summary of the amendments that Republican leaders are proposing to the Obamacare law points out that one of those amendment would reduce the Obamacare penalty for not signing up for insurance to “zero.”

“Under current law, most individuals are required to purchase health insurance or pay a penalty,” says the Ways and Means summary. “This section would reduce the penalty to zero for failure to maintain minimum essential coverage; effectively repealing the individual mandate.”

In sum, the Republican plan to repeal and replace Obamacare would eliminate from existing law the penalty for not signing up for insurance and add to existing law a one-year 30 percent premium hike for anyone who fails to buy insurance for 63 days or more.

The business and economic reporting of CNSNews.com is funded in part with a gift made in memory of Dr. Keith C. Wold.