Centrum 7/6  banner

Senate tax reform bill may doom ACA’s individual mandate

Print Friendly, PDF & Email

WASHINGTON — The Senate’s repeal of the Affordable Care Act (ACA) individual mandate as part of its sweeping tax reform bill has likely spelled doom for the provision, which required people who didn’t obtain health insurance to pay a tax penalty.

Sen. John Barrasso (R., Wyo.) said the 51-49 vote passing the Senate tax reform bill overturned “one of the most outrageous and unfair parts of Obamacare.”

The Senate legislation must still be reconciled with the House tax reform bill, which didn’t repeal the mandate. However, support in the G.O.P. conference for the provision’s elimination means it’s likely to be scrapped.

The implication of the repeal for the overall ACA remains uncertain. Ending the financial penalty for lacking coverage decreases motivation for healthy people to get insurance and offset the cost of covering the sick. Some experts cautioned that repeal would boost premiums or lead to insurers exiting certain areas. But others doubted that the impact would be that significant, saying the mandate’s effect on sign-ups was questionable at the outset.

One Republican senator who had reservations about doing away with the mandate, Susan Collins of Maine, said she decided to support the bill after Senate Majority Leader Mitch McConnell of Kentucky promised to back bipartisan legislation designed to help stabilize the ACA’s insurance marketplaces.

“I was deeply concerned that the repeal of the individual mandate would almost certainly lead to further increases in the cost of health insurance premiums — premiums that are already too expensive under the ACA,” Collins said. “I am very pleased the majority leader committed to support passage of two important pieces of legislation before the end of the year to mitigate these increases.”

Eliminating the mandate saves $300 billion over a decade in subsidies that would have been spent to help consumers buy insurance, according to the Congressional Budget Office (CBO), in turn providing savings for the tax cuts. The CBO projects that 13 million less people will have health insurance over the next 10 years without the mandate, and that premiums will rise 10%. But the office also said that markets will remain stable in “almost all areas of the country.”


ECRM_06-01-22


Comments are closed.

PP_1170x120_10-25-21