The GOP Tax Plan Just Became an Assault on Obamacare

Republicans in Congress have renewed their assault on Obamacare – this time through the Senate tax bill, which party leaders announced Tuesday will include language to abolish the individual mandate to buy health insurance.

The individual mandate spurs Americans to enroll in an insurance plan – or pay a fine to the IRS. The mandate is unloved by the public; heck, even Barack Obama campaigned against it in his primary contest with Hillary Clinton in 2008. But the mandate is a lynchpin of the Affordable Care Act, holding down premiums by keeping more healthy Americans in the system.

Repealing the mandate will cause the ranks of the uninsured to swell. Thirteen million fewer Americans will have insurance by 2027, according to the latest estimate by the nonpartisan Congressional Budget Office. That includes five million who would not enroll in Medicaid, five million who stop buying policies in individual market and an additional two million who would no longer get insurance from their employers.

For those Americans who do want to health insurance, the GOP’s mandate repeal would mean even greater sticker-shock. According to the CBO, “a repeal of the individual mandate … would result in higher premiums.” That’s because more “younger and healthier people” would chose to leave the market, leaving a higher proportion of older and sicker Americans in the insurance pool.

Michael Linden is the policy and research director for the HUB Project, which promotes expanded health care access. “If you repeal the mandate, you raise premiums for everyone,” he explained on Twitter. Over time you destabilize the system: “People get priced out of the market and lose their coverage.”

Why is the GOP going for mandate repeal now – in a tax bill?

The first answer is money: Over ten years, the federal government would avoid spending about $185 billion on subsidies for individual insurance premiums, and an additional $179 billion in Medicaid spending. Repealing the mandate saves nearly $340 billion all in – funds that the Senate GOP can use to finance deeper tax cuts.

The Senate tax bill is now skewed toward millionaires. In 2027, according to an analysis by the Institute on Taxation and Economic Policy, the Republican plan provides the richest one percent of Americans an average tax break of $43,300, compared to just $190 for the poorest 20 percent. With another $300 billion or so to play with, Republicans could offer richer carve-outs for the middle class. John Thune, a member of GOP Senate leadership as well as the tax committee drafting the bill, told reporters the money from the mandate repeal will be “distributed in the form of middle-income tax relief.”

The second answer is that this move gives Republicans political cover, teeing up one more shot at making good – at least in part – on their central campaign promise to repeal Obamacare. The Senate twice failed to pass repeal-and-replace measures this year, first in July and again in September. “The mandate repeal is a promise we all made, and we should keep,” said Sen. Rand Paul, a chief promoter of the idea.

But the mandate maneuver may complicate the future of the tax bill, rather than grease the skids for its passage. Moderate Sens. Lisa Murkowski and Susan Collins remains sticky wickets on weakening the ACA. And the universe of progressive activists that rose up to defeat the GOP’s previous attacks on Obamacare is already lighting up the phones in Congress.

As Linden sums it up, “The GOP tax bill was really, really terrible before they added ACA mandate repeal. It is now even worse.”

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