Tax Bill Kills Health Insurance Mandate

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The final tax bill being hammered out among Republicans in Congress thoroughly kills one of the most controversial provisions of the Affordable Care Act — the mandate.

The mandate requires just about everyone to have some form of health insurance or pay a fine. The Supreme Court calls it a tax.

 It was meant as an incentive so younger, healthier people who may not think they need or want health insurance would get coverage anyway. It was also a means of making sure people do not wait until they are sick to buy insurance.

Health insurance companies need these healthy people in the mix, paying premiums because it’s unaffordably expensive to cover only sick people.

“Having young and healthy people as part of the insurance pool helps keep premiums manageable for everyone,” a coalition of health and consumer groups, including the American Diabetes Association, the American Cancer Society Cancer Action Network and the American Lung Association, said in a joint statement.

Insurance companies have already said that without the mandate, they’ll have to raise premiums and pass on other costs to people who do have health insurance.

But Republicans note that Americans really dislike being told what to do and they have characterized the mandate as forcing people to buy a product they do not want.

The Congressional Budget Office estimated that ditching the mandate will help reduce the federal budget deficit, because fewer people will buy health insurance at rates subsidized by the federal government. The CBO projects savings of $338 billion between 2018 and 2027.

“The number of people with health insurance would decrease by 4 million in 2019 and 13 million in 2027,” the CBO said.

“Those effects would occur mainly because healthier people would be less likely to obtain insurance and because, especially in the nongroup market, the resulting increases in premiums would cause more people to not purchase insurance.”

The nongroup market refers to people who buy their own health insurance. Most Americans are covered by an employer. Many are covered by Medicare or Medicaid, a few get military health benefits and the so-called Obamacare markets were meant to help the rest get “nongroup” health insurance.

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