At this writing the House of Representatives has passed the Republican tax bill containing a repeal of the Obamacare individual mandate; the Senate and President Trump are expected to make the bill law this week. We asked Robert F. Atlas, strategic advisor and president of EBG Advisors, Inc. in Washington, D.C., what happens with the ACA now.
What happens when the individual mandate is repealed?
Most directly, the termination of the individual mandate will lead to fewer people taking up health insurance in the individual/exchange market. The non-partisan Congressional Budget Office (CBO) has projected that four million fewer people will be insured in the first year and 13 million fewer people will be insured in 2027. Moreover, the people most likely to drop coverage are younger and healthier, so the population that remains will skew costlier. That will cause premiums to rise and may lead even more people to drop out.
For health industry stakeholders, a decline in the percentage of the population that has health insurance is never good. However, some analysts believe the impact will not be dramatic since the vast majority of Americans will still have health coverage.
Greater worries for the health industry may emanate from different parts of the tax bill. For instance, the increase in the deficit overall may trigger the PAYGO (“pay as you go”) law that would immediately force a 4% cut to Medicare spending, or $25 billion in the first year alone.
Will Congress try another run at the ACA, as it did with the American Health Care Act?
It’s unlikely Congress will take another run at the ACA writ large. Eliminating the individual mandate accomplishes much of what Republicans were seeking with ACA repeal. Their other main targets were the Medicaid expansion to cover non-disabled adults and – something not part of the ACA at all – the core Medicaid entitlement.
House Speaker Paul Ryan has gone on record saying that Congress will pursue entitlement reform in 2018. However, no new concrete proposals have been put forth. The so-called ACA repeal-and-replace bills that failed in 2017 did include provisions to cap the federal contribution to Medicaid through either per capita allotments or block grants to states. Expect to see the same ideas floated again in 2018.