- The Washington Times - Sunday, November 19, 2017

Five million people will decide they no longer want free government health care if Congress scraps Obamacare’s individual mandate that currently forces them to obtain coverage, says the Congressional Budget Office.

Another 5 million would forgo buying plans on and off the exchanges by 2027, once they are free from the compulsion, the CBO says, in looking at Republicans’ latest proposal to nix the individual mandate as part of the tax code overhaul.

GOP lawmakers question the assumptions, wondering why those poor people who qualified for Medicaid would suddenly decide they didn’t want it, or would never hear about it in the first place. But Republicans are happy to accept the outcome: savings of more than $300 billion, which the GOP can pump back into its tax cut package.

Senate Republicans have managed to turn the tax-cut debate into an Obamacare fight, reigniting all of the questions that have raged over the last decade about who benefits from the government forcing Americans to obtain health insurance.

Without the mandate premiums will rise by an average of 10 percent, CBO analysts said, as insurers react to being stuck with sicker people who will cling to coverage.

People who get insurance through a job probably won’t see much of a difference, but those who buy it on their own would struggle, especially if don’t qualify for subsidies that defray rising rates.

Young people who don’t use much health care are expected to leave the exchanges first, though older people who decided to leave company gigs and become their own bosses — yet don’t yet qualify for Medicare — might forgo coverage too.

Even families who qualify for some subsidy might decide they no longer want to pay deductibles that reach into the thousands of dollars.

“They could easily bag it if there is no fine,” said Robert Laszewski, a health policy consultant in Virginia.

All told, the CBO says repealing the mandate, which requires non-exempt Americans to get covered or pay a tax, will result in 4 million fewer people holding insurance in 2019 and 13 million by the end of the coming decade.

Democrats say that’s a strong argument for keeping the mandate that President Obama included in his signature law to prod healthy people into the markets, hoping to balance out sicker people who could no longer be refused coverage.

Yet Republicans say people won’t drop out unless they want to, so the government should stop punishing them.

“This is the result of an assumption about economic behavior that is 100 percent voluntary,” said Senate Finance Committee Chairman Orrin G. Hatch, the Utah Republican whose committee approved a plan last week to repeal the mandate.

Non-exempt people must pay $695 or 2.5 percent of qualified income to the IRS if they shirk insurance.

Republicans say 80 percent of the roughly 6.5 million people who ended up paying the penalty in the most recent tax year earned less than $50,000 per year — those who can least afford it. They said that means eliminating the mandate means even more middle class relief.

Sen. Ron Wyden, Oregon Democrat, said Republicans are less concerned about the little guy than appeasing corporate donors with a big tax cut, while distorting health markets in the process.

“Thirteen million Americans will lose their health care. Premiums will skyrocket for millions more,” he said.

The CBO says 10 million of those who end up uninsured would be evenly split between people who’d no longer join Medicaid, the insurance program for the poor, and those who shirk the individual market, which includes the web-based exchanges set up under Obamacare.

About 2 million people would opt out of job-based insurance because they think their share of premiums is too high and they can spend that money on something other than a penalty. The remainder would leave the Basic Health Program, an Obamacare offshoot that some states set up to deal with people who would shuffle between the exchanges and Medicaid.

S&P Global Ratings recently said the CBO appeared to overestimate the mandate’s impact. It projects that only 4 to 5 million people would drop out of coverage over the coming decade, resulting in $60-$80 billion in savings.

“Our estimates are lower because we believe that it is not the mandate penalty, but the intrinsic financial incentives available to most eligible enrollees that drive enrollment in these two markets,” said S&P credit analyst Deep Banerjee.

Douglas Holtz-Eakin, a former CBO director, said though the mandate has been an ineffective prod overall, unsubsidized customers in rural areas would be ripe candidates to opt out of coverage if the penalty goes away.

Isolated parts of the country have struggled to spark competition on their exchanges and keep rates low, so customers there would feel extra pain if insurers followed through on threats to jack up prices in response to losing the mandate.

Farmers, ranchers and other small-business owners in these areas might drop coverage if it’s no longer required by law.

Critics say the CBO overestimated the mandate’s effects on Medicaid enrollment, arguing few people would shirk what’s essentially a no-cost entitlement borne by taxpayers.

But others say the mandate is a nudge that gets people to check whether they are eligible for publicly funded insurance, particularly if their incomes fluctuate and they toggle in and out of the program’s reach.

The Affordable Care Act’s web portals use a “no wrong door” approach in which customers can log on and, based on their income, are diverted either to Medicaid or Obamacare’s exchanges.

“Automated eligibility with the ACA dramatically improved enrollment. Most people do not know what they’re eligible for. It wasn’t just expansion population, but core Medicaid grew a lot,” said Andy Slavitt, who led the Centers for Medicare and Medicaid Services under Mr. Obama.

It’s still unclear if repeal of the mandate will be in any tax bill that makes it to Mr. Trump’s desk. While it’s in the current Senate bill, the House didn’t include it.

White House officials Sunday said they’re open to removing it from the Senate version if it becomes an impediment to passing the broader tax effort.

Ben Wolfgang contributed to this report.

• Tom Howell Jr. can be reached at thowell@washingtontimes.com.

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