Republicans didn’t get their wish to repeal former President Barack Obama’s health care law, but the tax bill barreling toward a final vote in Congress guts its most unpopular provision, the requirement that virtually all Americans carry health insurance.
Politically, the move is a winner for Republicans, who otherwise would have little to show for all their rhetoric about “Obamacare.”
But if estimates by the nonpartisan Congressional Budget Office are right, it will lead to more people being uninsured and higher premiums for those buying individual health insurance policies.
And Congress may then find itself considering other ways to nudge people to get health insurance.
The CBO estimates that repealing the requirement would lead to more people taking a gamble on going without coverage, raising the number of uninsured Americans by 4 million in 2019 and by 13 million a decade from now. The federal government would save about $338 billion over a decade because fewer people would seek subsidized coverage under the Affordable Care Act. But premiums for individual plans would go up about 10 percent because the people left behind would tend to be sicker.
Independent experts debate the precise impact, noting that with about 28 million people still uninsured, the so-called individual mandate doesn’t seem to have worked very well in the first place.
“The data is very murky on how much of an effect the individual mandate has had,” said Larry Levitt of the nonpartisan Kaiser Family Foundation. “I think it’s likely that millions more people will be uninsured with the individual mandate repealed but not to the extent that CBO projected. Insurance premiums will certainly go up.”
Other major elements of “Obamacare” would remain in place, including its subsidies for premiums, protections for people with pre-existing medical conditions and its requirement that insurers cover a broad range of “essential” benefits. Little impact is seen on employer plans, the mainstay for workers and their families.
The insurance requirement is enforced through fines collected by the IRS. Anecdotal evidence suggests that many of the people who have been paying the fines are workers with modest incomes — the group that the health law was supposed to help in the first place.
Health economist Gail Wilensky said repealing the mandate might take some of the political steam out of the health care debate. It may even point to a path for lawmakers of both major parties to consider measures that would help stabilize insurance markets for people who don’t get coverage on the job.
It “may be enough to take away what has been the single most hated part of the ACA for both Republicans and Democrats,” said Wilensky, who served in a previous Republican administration.
But that won’t solve the problem of providing affordable coverage for people who don’t qualify for subsidies through “Obamacare.”
President Donald Trump’s administration is working on another track: regulations that would allow broader sale of lower-cost plans with limited benefits.
How much consumer appeal that alternative will have remains to be seen.