As Tax Bill Unfolds, What's In Store for Obamacare's Individual Mandate?

From - December 5, 2017

As Tax Bill Unfolds, What's In Store for Obamacare's Individual Mandate?

TUESDAY, Dec. 5, 2017 -- As U.S. House and Senate leaders huddle to reconcile differences between their respective tax reform bills, the fate of the Affordable Care Act's individual mandate remains uncertain.

Senate Republicans' sweeping tax overhaul measure, passed early Saturday, includes a provision to repeal the controversial mandate, which requires most Americans to have health insurance or pay a penalty. The House version does not include a similar provision.

Repealing that part of the Affordable Care Act (ACA) would result in 13 million fewer people having insurance coverage over the next decade, according to an independent analysis by the U.S. Congressional Budget Office (CBO).

Premiums in the individual insurance marketplaces, where consumers can purchase insurance under the Affordable Care Act, also known as Obamacare, would rise by about 10 percent in most years, the CBO projected.

The individual mandate is "critical" to a well-functioning marketplace, explained Sam Berger, a senior policy analyst at the Center for American Progress. It brings more people -- especially younger, healthier ones -- into the marketplace, which helps keep premiums lower for everyone.

"This is the way insurance works, right? If you could buy fire insurance after your house burned down, it would not make any economic sense," he said.

Obamacare opponents want to see the mandate go away.

Ed Haislmaier, senior research fellow at The Heritage Foundation, a conservative think tank, said people are better off without it because it's an unwarranted tax.

He also questions whether the mandate has been effective in prodding people to get health insurance coverage.

"For the mandate to have effect, you have to believe that there are people who, one, do not think they need health insurance; two, do not like what's being offered or the price that it's being offered at [and] would rather not pay it; or, three, are going ahead and buying it anyway because to not buy it they would be penalized," Haislmaier said.

If there are not a lot of people motivated by the mandate, then removing it "would have little or no effect on people buying coverage," he added.

Cori Uccello, a senior health fellow at the American Academy of Actuaries, said that the mandate could have been stronger, but "it's tough to argue that the mandate did not have any effect at all."

If the mandate goes away, it becomes a vicious cycle of rising premiums and people dropping out of the insurance pools, she said.

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