Obamacare’s Insurance Mandate Is Unpopular. So Why Not Just Get Rid of It?

Obamacare’s Insurance Mandate Is Unpopular. So Why Not Just Get Rid of It?

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In a bill with many unloved parts, the Affordable Care Act’s individual mandate has long been the most loathed.

For years, critics of the bill have said the law’s requirement that Americans either obtain insurance or pay a fine was coercive and unfair. The mandate brought about a Supreme Court case that nearly toppled the whole Affordable Care Act. Public opinion polls consistently show that ordinary Americans dislike it.

Even many of Obamacare’s authors had to be talked into the mandate. As a presidential candidate, Barack Obama campaigned on a health plan that didn’t punish people who went without health coverage. Mitt Romney, whose Massachusetts health reform bill was the blueprint for Obamacare, had also initially hoped for a plan without a mandate.

Now it turns out that getting rid of the mandate could help Republicans as they tackle the difficult math of tax reform. According to a recent Congressional Budget Office estimate, eliminating the mandate could lower the deficit by $338 billion over a decade. A third of a trillion dollars can help pay for a lot of tax cuts. Which is why Senate Republicans, trying to find funding and keep their promise to dismantle Obamacare, are now vowing to add a mandate repeal to their tax bill.

But there’s a reason that Obamacare’s authors kept a provision so unpleasant and unpopular. And there’s a reason the budget office said that cutting it would save so much money. Without the mandate, economic studies have suggested, fewer healthy people would buy health insurance. Their exit from the market would raise insurance prices, driving out still more healthy people in an unhappy spiral of rising prices and lower rates of insurance coverage.

The mandate was often compared to one support in a three-legged stool that made Obamacare work: Knock it out, and the whole apparatus would tip over, broken and useless.

That was the logic that persuaded Mr. Romney to put the mandate in his health bill, and the thinking that persuaded President Obama to change his mind and put it in the Affordable Care Act.

Without the mandate, the C.B.O. has said for years, premiums would spike, and millions fewer Americans would have health insurance. The budget office’s most recent estimate, published last week, said that the ranks of the uninsured would rise by 13 million over 10 years, and that average premiums would be 10 percent higher than under current law.

If you wanted health reform to work, the thinking went, you needed to eat the broccoli of the individual mandate, so you could then enjoy the dessert of a health care system accessible to people with pre-existing illnesses. (Much of the debate during oral argument at the Supreme Court focused on hypothetical broccoli-purchase mandates.)

The insurance industry, concerned that it will be left operating in an unsustainable market, has been particularly exercised in emphasizing this point at every turn. On Tuesday, it sent a letter to congressional leaders urging them to preserve the mandate.

For years, conservative health care analysts have said the budget office has erred in assuming that the insurance requirement has so much power over who gets health insurance. Under the budget office’s estimates, eliminating the mandate doesn’t just drive people out of the individual insurance market, where people pay premiums to buy coverage; it also sharply lowers the number of people enrolled in Medicaid, a program that low-income Americans can access largely without cost to them. Republican critics have said that the Medicaid estimates are unrealistic and unfair to any health reform plan that doesn’t include a mandate.

But now Republicans are embracing what they have long described as the mandate’s overstated importance. That’s because the only way the measure could achieve $338 billion in savings is by causing many fewer Americans to have government-subsidized health insurance. Most of the savings in the budget office’s calculations regarding repealing the mandate come from lowering Medicaid enrollment. If the budget office took the Republican critiques to heart, the mandate would be much less useful as a component of tax reform.

And it appears the budget office has, indeed, heard their complaints. In the recent report, its economists indicated that the office was re-evaluating its assessment of the mandate.

“The agencies have undertaken considerable work to revise their methods to estimate the effects of repealing the individual mandate,” the report notes near its end. While that work was not completed in time to assess the current tax proposal, new estimates should be ready soon. Under the new model, “the estimated effects on the budget and health insurance coverage would probably be smaller than the numbers reported in this document,” the report says.

That will make the mandate less central to the success of future health care overhaul ideas. And less valuable as a means to pay for tax cuts.


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