Round and Round: The Senate Tax Bill and The Individual Health Insurance Mandate

The Senate has introduced into their proposed tax bill, a repeal of the individual health insurance mandate. Unfortunately, harming the ACA and individual American’s health insurance is still an agenda item for the GOP urged by Trump. From a numbers standpoint, it would increase federal revenues by $338 billion over 10 years. However, the cost is high as the CBO finds that Repealing the Individual Health Insurance Mandate would mean that 4 million fewer people would have health care in the first year and 13 million people would have no coverage by 2027 AND premiums would rise by about 10% in most years of the decade. The individual mandate is the mechanism that allows guaranteed coverage for people with pre-existing conditions to have coverage by offsetting their anticipated higher claims with people who are in better health. Insurance Markets work by pooling risks and offsetting higher risks with lower risks. And even those start off healthy will sooner or later develop some type of medical issue. Tax reform on it’s own is a major undertaking and there has not been any major tax reform in 30 years. The GOP also failed multiple times to repeal and/or modify the ACA. Mixing taxes and health insurance together is going to make it less likely that either will pass. The House has so far, not included repeal of the individual mandate into their proposed tax bill. In order for a bill to go to Trump, the House and Senate will need to agree and both pass the same bill. Practically speaking, the earliest this would go into effect is 2019.

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