Repealing Obamacare’s mandate requiring Americans to buy health insurance would save the federal government $338 billion over the next decade as 13 million people would forgo coverage, freeing the government from having to subsidize them, scorekeepers said Wednesday in an analysis could reshape the Republican push to overhaul the tax code.
Premiums would rise an average of 10 percent in most years of the coming decade because healthier people would be less likely to buy insurance once they’re no longer forced to, the Congressional Budget Office said. The resulting rate hikes would chase more people away, leading to the drop of 13 million.
Analysts said most markets would remain stable, however, echoing previous analyses that said taxpayer-funded subsidies are an adequate cushion against price shocks for many customers.
The CBO released the estimates as President Trump prods congressional Republicans to scrap a major part of Obamacare this year, freeing up money that could be used to provide even deeper tax cuts.
The individual mandate is the most unpopular part of the 2010 health law, though President Obama included it to spur enough healthy people into the market to balance out sicker customers, who could no longer be denied coverage.
Repealing the provision would erase its tax revenue, yet it would actually save money over time, because fewer people would seek coverage and draw taxpayer-funded subsidies that defray their premiums.
The flip side is estimated coverage losses, starting with 4 million fewer Americans holding coverage in 2019.
House Ways and Means Committee Chairman Kevin Brady, the chamber’s top tax-writer, is wary of loading down his complex tax effort with health care items, but he hasn’t entirely ruled it out.
He had asked for the updated CBO estimate to decide on a path forward.
Democrats said using a partial Obamacare repeal to fund tax cuts was cruel.
“This backdoor attempt at sabotaging the health care system would send premiums shooting up and cause millions of Americans to lose their health insurance,” said Senate Minority Leader Charles E. Schumer.
“Sneaking Trumpcare into a tax bill that would already be bad for middle-class families would be adding insult to injury,” he said.
For months, Republicans said the CBO overestimated coverage losses during the Obamacare repeal debate.
The CBO says it will, in fact, revise the model it uses to evaluate the mandate. That work is ongoing, however, so it relied on its existing model for the new report.
Sen. Mike Lee, Utah Republican, reacted angrily to reports that CBO was reconsidering its model, saying it might result in significantly less savings from repealing the mandate.
“Just a few months ago the CBO had us playing by one set of rules for debating health care policy and now we are being told those rules have been completely changed for tax policy,” he said Tuesday. “This is simply unacceptable.”
Mr. Lee wants Congress to pass a bill that would force the CBO to publish its data and other details on how it arrives at its conclusions.