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CBO: Repeal of individual mandate would increase premiums, markets would remain stable

Healthier people would be less likely to get insurance and because of premium increases, fewer people would get coverage, the CBO says.

Susan Morse, Senior Editor

The Congressional Budget Office estimates 4 million people would lose health insurance in 2019 and the decrease would reach 13 million in 2027 should the government repeal the individual mandate to get coverage.

Average premiums in the individual market would increase by about 10 percent during most years of the next decade, if the ages of those purchasing insurance remains relatively the same, according to the report by the CBO and the Joint Committee on Taxation.

[Also: Individual mandate could be on Trump's chopping block]

Healthier people would be less likely to get insurance and because of premium increases, fewer people would get coverage, the CBO said.

Despite these factors nongroup insurance markets would continue to be stable in almost all areas of the country throughout the decade, according to the report.

[Also: Repeal of individual mandate would save less than originally estimated, CBO says]

The same results would occur if the penalty for not getting insurance were eliminated but the mandate was not.

Yesterday, the CBO estimated that doing away with the mandate would decrease the federal deficit by $338 billion over the next decade, not the $416 billion originally projected.

The nonpartisan agency later released a more thorough review of the effects of repealing the individual mandate.

The CBO scored the impact at the request of the House Ways and Means Committee which was marking up the Tax Cuts and Jobs Act and considering the individual mandate repeal.

However, Politico has reported that a new version of the House Republican tax overhaul bill does not include the repeal.

President Donald Trump has said if legislators do not cut the mandate, he would issue an executive order essentially weakening the requirement for individual coverage by allowing more people to get a hardship exemption.

The Administration recently cut cost-sharing reduction payments to insurers that help lower-income consumers pay lower deductibles and out-of-pocket costs for ACA silver-tiered plans.

Insurers have decried these cuts, and many increased premiums to make up for the loss of CSRs just as open enrollment began on Nov. 1. The ACA law still requires them to provide consumers with the benefit the CSR money provided.

The outcry over repeal of the individual mandate has not been as loud, though insurers have said without it, they would have to increase premiums more.

America's Health Insurance Plans said it wouldn't say anything until actual language is introduced.  AHIP has previously touted the need for consumers to have continuous coverage to keep markets stable.

"As policymakers consider the future of the individual health insurance market, AHIP has developed recommendations for solutions that can deliver long-term benefits for consumers: lower costs, more choices, and better quality care," AHIP said on its website, without going into the details of its its recommendations.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com

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