Republicans in Congress are rushing to advance a tax reform bill that balloons the federal deficit so that they can give corporations permanent tax breaks. And now Senate Republicans have decided to turn their already awful tax bill into a secret Trumpcare bill by including a repeal of the Affordable Care Act’s individual mandate.
While repeal of the individual mandate may seem like a small change to the casual observer, the impact would be radical, especially in conjunction with other administrative and regulatory changes coming down the pike from the Trump administration. The tax reform bill puts everyone’s health care coverage at risk, all to make tax cuts for corporations permanent.
The individual mandate protects people with pre-existing conditions
First, a quick review is in order: Few Americans want to go back to when kids with asthma and breast cancer survivors could be charged more or denied coverage due to their pre-existing conditions. But the individual mandate is essential for guaranteeing these protections. When the ACA required insurance companies sell coverage to the old and the sick without charging them sky-high rates, it had to make sure that the insurance market wouldn’t go into a death spiral due to only the sickest seeking coverage. Insurers would need more young and healthy customers to balance out the costs of covering people with pre-existing conditions.
Most health economists and industry insiders agree that a coverage mandate is the best way to make a market-driven approach to universal coverage work. More than seven years after passage of the ACA, Republicans in Congress have yet to propose an alternative that would protect people with pre-existing conditions.
The individual mandate stabilizes health insurance markets and keeps premiums down
Absent a mandate, healthy folks could go uninsured and sign up for coverage only when they need it. Since insurers wouldn’t be allowed to deny coverage to the sick, they would have to continually raise premiums to balance out the high per-enrollee-costs. The Congressional Budget Office estimates that premiums would increase by hundreds of dollars each year for middle-income Americans and by thousands for older Americans if the mandate is repealed. While the ACA’s financial assistance remains in place under the tax reform bill, many Americans make too much to qualify, and they would increasingly be priced out of coverage.
Mandate repeal is the first step toward Trumpcare’s high risk Pools
Repealing the mandate on its own would leave 13 million Americans uninsured, according to the Congressional Budget Office, with about 408,000 North Carolinians losing health insurance coverage. But the impact could be even starker given the Trump administration’s planned regulatory changes.
As announced via executive order last month, the Trump administration is planning to flood the health insurance market with loosely regulated bare-bones plans. The executive order has yet to be implemented, but new regulations are forthcoming from the administration. Under the guise of expanding choice for Americans, these Trumpcare changes would destabilize the ACA’s insurance markets and further jeopardize protections for people with pre-existing conditions.
As NC Justice Center’s a statement from the NC Justice Center released on the day of the executive order explained:
“By expanding the sale of loosely-regulated short-term plans, the order aims to pull out young and healthy enrollees from the Marketplace and put them into bare-bones policies with sky-high deductibles, dollar- and service-limits on coverage, and pre-existing condition discrimination. By trying to create a parallel health insurance market for the young and healthy, the Trump administration would make the ACA’s Marketplace look like a de facto high risk pool, as low-risk consumers are siphoned off into junk insurance markets.
The harm from these proposed changes would be even more extreme if Congress repeals the individual mandate, as young and healthy folks could get duped into enrolling into a junk plan that offers bare-bones coverage and minimal financial protection. Those who will be most immediately and severely harmed are middle-class Americans who do not qualify for financial help under the ACA, as they’ll be priced out of affordable coverage due to skyrocketing premiums.”
The tax bill is bad for your health
But even if Senate Republicans recognize the error of their ways and decide not to repeal the individual mandate, the tax reform bill itself still threatens the health care of every American. The fiscal impact—massively increasing the deficit to fund trickledown economics that haven’t worked—will require lawmakers to try to balance the budget down the line through spending cuts. Medicare, Medicaid, the Affordable Care Act, and other health programs will be on the chopping board if tax reform passes.
The bottom line: The U.S. Senate’s tax bill is not only a boon to the rich; it is bad for our health. As part of the broader Trump agenda on health care, the tax reform bill would destabilize health insurance markets and put older adults and people with pre-existing conditions at risk. The Senate should go back to the drawing board and come up with some new ideas that haven’t already been rejected by their constituents.
Brendan Riley is a Policy Analyst at the North Carolina Justice Center’s Health Advocacy Project.