If the Affordable Care Act's mandate penalties and subsidies are replaced, but the law's market reforms are left untouched,18 million more people would be uninsured in the first new plan year, according to new figures released by the Congressional Budget Office and the Joint Committee on Taxation.
Later, after the ACA's expansion of Medicaid eligibility and subsidies for insurance purchased through the marketplaces go away, that number would increase to 27 million, and then to 32 million by 2026.
The CBO and JCT used the Restoring Americans' Healthcare Freedom Reconciliation Act of 2015 as a template for coming up with its estimates. The bill was an earlier attempt by Congress to repeal large swaths of the ACA. With President-Elect Donald Trump set take office and a Republican majority in both houses of Congress, calls for ACA repeal have been renewed, and while details of a replacement plan have yet to take shape, the CBO is guessing it may be similar to that 2015 bill, which would have eliminated the individual and employer mandates while leaving the market reforms untouched.
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The estimated increase of 32 million people without coverage by 2026 is the net result of roughly 23 million fewer with coverage in the nongroup market and 19 million fewer with Medicaid coverage, partially offset by an increase of about 11 million people covered by employment-based insurance. By CBO and JCT estimates, 59 million people under age 65 would be uninsured in 2026, compared with 28 million under current law. That's about 21 percent of people under the age of 65. By 2026, fewer than 2 million people would be enrolled in the nongroup market.
The relative ubiquity of coverage isn't the only thing that would be affected. Premiums in the nongroup market -- for individual policies purchased through marketplaces or from insurers -- would increase by 20 to 25 percent, relative to current projections, in the first new plan year. The increase would reach about 50 percent in the year following the elimination of Medicaid expansion and the marketplace subsidies, and premiums would almost double by 2026.
Nixing the individual mandate would not only reduce the number of people purchasing health insurance, the CBO found, it would change the mix of people with insurance, causing smaller reductions in coverage among older and less healthy people, and larger reductions among young people with relatively low healthcare costs. That would increase costs among those retaining coverage, and insurers would have to raise premiums in the nongroup market to cover those costs. Lower participation by insurers in the nongroup market would place additional upward pressure on premiums because the market would be less competitive.
There's already been some precedent. In the past, individual states have implemented similar market reforms, without a mandate penalty or subsidies, and the CBO and JCT found that this approach destabilized the markets. Several states that enacted such reforms later repealed them, or modified them substantially.
The CBO and JCT cautioned that the effects of ACA repeal may differ from those projections depending on what type of replacement platform is offered by Congressional Republicans.