With 51 votes in favor, the Senate passed a tax overhaul on December 2. This major GOP victory confirmed the repeal of Obamacare’s individual mandate as a part of the party’s tax-cut bill. Republican Senator John Barrasso of Wyoming applauded the vote, and noted that, “Families ought to be able to make decisions about what they want to buy and what works for them – not the government.” However, according to The Hill, many experts and healthcare groups warn that the repeal will “destabilize Obamacare markets, leading to premium increases or insurers simply dropping out of certain areas. Without financial penalty under the mandate for lacking health care coverage, there is less incentive for healthy people to sign up and balance out the costs of the sick.”

The Congressional Budget Office (CBO) stated that the mandate would save 300 billion dollars over the next 10 years in subsidies, which thus provides savings for the tax cuts. However, the CBO also estimated that premiums will rise by 10 percent and 13 million fewer people will have health insurance over the next 10 years without the mandate. Which is more important: saving money or providing health insurance? President Trump has emphasized his intent to fully repeal and replace Obamacare after the final tax bill passes. A classic blanket statement with the intent of riling up his followers graced Trump’s Twitter in late October: “We will Repeal & Replace and have great Healthcare soon after Tax Cuts!” 

The Center for American Progress notes that the mandate’s repeal has a two-fold effect on the U.S. market. First, “people who expect to be healthy would avoid purchasing coverage until they need it. As a result, the remaining enrollees in the individual market would be sicker on average, and insurance companies would need to raise rates to cover the increased average cost.” Second, “the resulting higher premiums would discourage additional people from purchasing coverage through the individual market. Those who become uninsured would no longer have financial protection against catastrophic medical costs, and hospitals and other providers would be forced to provide more uncompensated care.” 

According to Politico, “insurers warn that scrapping the individual mandate could capsize the already wobbly markets, which have been buffeted by skyrocketing premiums and dwindling competition.” The same Politico article explains that many of the largest health care industry groups, such as America’s Health Insurance Plans, the American Hospital Association and the American Medical Association, sent a letter last month to Senate Majority Leader Mitch McConnell cautioning against eliminating the penalty for failing to obtain coverage. CEO of L.A. Care Health Plan, John Baackes, added further that “Eliminating the mandate is pulling the plug on the individual market … I think this is a cowardly way of doing it.”

Overturning the mandate also enables insurers to take advantage of the outlined conditions. The New York Times notes that “some experts speculate that insurers are likely to exploit the existing ACA market as a way of selling short-term policies to people until they have serious medical conditions.” President of Health Policy and Strategy Associates, a D.C.-based policy and marketplace consulting firm, Robert Laszewski stated that coverage sold under the federal law would become increasingly expensive, with people priced out of the market if they fail to receive subsidies. 

This overturn of the Obamacare mandate is the first step toward Trump’s larger plan to repeal and replace the entire Affordable Care Act. How much longer will the American people be forced to watch President Obama’s legacy burn up in flames? Will the 2018 elections enable the Democratic Party to rise from the ashes? 

Contact JJ Citron at [email protected].