President Donald Trump wants to repeal Obamacare’s individual mandate as part of the Republican tax overhaul.
Repeal the mandate, get a win on health care, and open up more money to be used for bigger tax cuts, the president tweeted on Wednesday.
It’s an idea endorsed by some conservative stalwarts like Sens. Tom Cotton (R-AR) and Rand Paul (R-KY). To them, it’s a no-brainer: You get rid of the most unpopular piece of the Affordable Care Act, after Republicans failed to repeal the whole law, and repealing the mandate does save money that could then be redirected to tax cuts.
The only problem is: The lawmakers actually writing the tax bills don’t want to do it. Tax reform is going to be hard and repealing Obamacare proved impossible — combining the two together would be dangerous, in their eyes.
House Ways and Means chair Kevin Brady (R-TX) told reporters Tuesday that his tax bill, expected to be unveiled Thursday, would not repeal the mandate.
“What I don’t want to do is to add things that could again kill tax reform like health care died over there,” Brady said.
Senate Finance chair Orrin Hatch is on the same page.
If Republicans did go this route, it’s true that they could cut taxes even deeper. But the cost would be an estimated 15 million fewer Americans having health insurance.
Repealing the individual mandate means 15 million more uninsured
Trump is right: The Congressional Budget Office has projected that repealing the individual mandate saves the federal government $416 billion over 10 years. That is money that, if the mandate repeal were included in tax reform, could be used to pay for deeper tax cuts.
But why does repealing the mandate, which actually brings in federal revenue through tax penalties, save money?
Because fewer Americans would be enrolled in Medicaid and on the ACA’s insurance marketplaces, where they receive federal assistance. CBO has estimated 15 million fewer Americans would have health insurance over the next 10 years if the mandate were repealed.
Repealing the mandate is also going to increase premiums for people who still purchase insurance through the ACA. The mandate is in the law to encourage young and healthy people to sign up for coverage. Without it, those people are more likely to leave the market, which will make the remaining market older, sicker, and ultimately more expensive.
“CBO and JCT estimate that adverse selection would increase premiums for policies in the nongroup market, whether purchased through the marketplaces or not, by roughly 20 percent relative to premiums under current law,” the office said.
So Trump wants to add a provision to the tax bill that increases the number of uninsured Americans and increases health insurance premiums.
Remember: The GOP’s skinny repeal proposal, which didn’t do much more than repeal the ACA’s mandates, couldn’t get 50 votes in the Senate, in part for those reasons. The tax bill’s path to 50 is already going to be narrow: 50 of the 52 Republicans senators must back it.
So it’s easy to see why Brady and Hatch don’t want to add any new complications to their tax overhaul. But Trump, it appears, might try to force their hand.