It increases the ranks of the uninsured by 13 million.
Republicans are on the verge of achieving one of biggest policy goals of the past decade: unraveling the Affordable Care Act.
The Tax Cuts and Jobs Act, as being considered in the US Senate, repeals Obamacare’s individual mandate. That change, according to the Congressional Budget Office, would cut $338 billion over 10 years from Medicaid and insurance subsidies and lead to 13 million fewer people having health coverage. That will, according to the best evidence we have, lead to an increase in preventable deaths on the order of 15,600 people per year.
It will do more than that, though. It will completely destabilize the market for individual health insurance. The individual mandate serves a critically important function for people buying health insurance outside of an employer. It makes sure that young and healthy people with low health expenses buy insurance, which lowers premiums for everyone else. That ensures that people with chronic health conditions who don’t get insurance from work can buy coverage at an even barely reasonable price.
Without the mandate, the individual market could easily collapse into what’s known as a “death spiral,” in which healthy people flee the individual health insurance market en masse, leaving the remaining customers to just be less healthy or older people, who’d then face huge premiums. They’d get some help from Obamacare’s insurance subsidies, which would remain and cap premiums as a share of income for low- and middle-income people. But even that might not be enough to make the plans affordable. And if enough people quit, then insurers could stop offering plans in some areas altogether.
Some of the healthy and younger people, in turn, would then grow older and sicker. Some would get potentially fatal illnesses, and without insurance wouldn’t Read More Here