Individual Mandate Repeal Would Remake The Market

WASHINGTON (AP) — Millions are expected to forgo coverage if Congress repeals the unpopular requirement that Americans get health insurance, gambling that they won't get sick and boosting premiums for others in a sharp break with the idea that everyone should contribute toward health care.

Just as important, the drive by Senate Republicans to undo the coverage requirement under former President Barack Obama's health care law fits neatly with the Trump administration's effort to write new regulations allowing for skimpier plans with limited benefits and lower premiums.

Put the two together and the marketplace for about 18 million people buying their own health insurance may look very different in a few years. Consumers would have layers of new options with different pluses and minuses. They'd notice a shift away from the "Obamacare" requirement that health plans cover a broad set of "essential" benefits. New winners and losers would emerge.

Defending the GOP's move, the Senate's chief tax writer said Wednesday that the "Obamacare" fines on people who go without coverage amount to a tax on working people. "It's a terribly regressive tax that imposes harsh burdens on low- and middle-income taxpayers," said Finance Committee Chairman Orrin Hatch, R-Utah.

But Sen. Patty Murray of Washington, the ranking Democrat on the Health, Education, Labor and Pensions Committee, said doing away with the coverage requirement will undermine insurance markets and raise costs, particularly for those who need care. She accused Republicans of "sneaking devastating health care changes into a partisan bill at the last minute."

The Congressional Budget Office has estimated that repeal of the insurance requirement would save the government $338 billion through 2027, mainly because fewer people would seek subsidized coverage. That would give GOP lawmakers money to offset some of the tax cuts they're proposing.

CBO estimates the number of uninsured would rise by 13 million by 2027, reversing coverage gains seen under Obama. Because fewer people would be paying into the insurance pool, premiums for individual plans would rise about 10 percent. Little impact was expected on employer coverage.

Repealing the mandate would be like taking away the stick that nudges people to get comprehensive health insurance, while the skimpier plans envisioned by the Trump administration's regulation writers would be like new carrots introduced into the marketplace, said Katherine Hempstead, who directs health insurance work for the nonpartisan Robert Wood Johnson Foundation.

"They point in the same direction," Hempstead said of the changes sought by Senate Republicans and the administration. "Not requiring people to buy comprehensive coverage and giving them alternative sources of more bare-bones coverage."

The result would be higher premiums for people who need comprehensive health insurance, often those who are older and patients coping with chronic conditions. "It's going to leave a lot of people poorly served," she said.

GOP economist Douglas Holtz-Eakin said that he thinks the predictions of dire consequences are overstated and that repealing the mandate would be more like a safety valve for a health insurance market that is pricing out people not entitled to subsidies under "Obamacare."

"In the individual market, this is all about getting premiums down so people will want to buy, as opposed to making them have to buy," Holtz-Eakin said. A former CBO chief, Holtz-Eakin said he thinks the agency's current estimates give too much weight to the effectiveness of the coverage mandate in getting people to buy coverage.

He points to nearly 30 million Americans still uninsured. "We made it illegal to be uninsured, we're paying people to get insured, and we still have many uninsured," Holtz-Eakin said. "I don't think it's very effective."

A poll released Wednesday by the nonpartisan Kaiser Family Foundation found that 55 percent of Americans support eliminating the mandate as part of the GOP tax overhaul while 42 percent are opposed.

Julian Rostain, a cook from the Philadelphia area, said for him the mandate meant paying about $350 to the IRS for being uninsured during part of last year.

"I feel like I'm in good shape, and if I went a few months without health insurance, I wouldn't be terribly worried," said Rostain, in his late 20s. "I don't think it's fair when you penalize people who can't really afford it in the first place. It doesn't make sense."

But insurers, hospitals and doctors say that from the standpoint of society as a whole, some kind of requirement needs to be in place.

"You really have to make sure that we have enough healthy people who are paying their premiums so that those who are facing significant chronic diseases are not left having to pay higher costs," said Dr. Michael Munger, president of the American Academy of Family Physicians. "I would say to younger, healthier people: 'You need to have coverage for when the unforeseen happens.'"

Repeal of the insurance requirement would take effect in 2019, so it remains in effect for next year. Government figures released Wednesday show 2018 health law sign-ups are well ahead of last year's pace, with nearly 1.5 million picking a plan in the first two weeks of open enrollment.

Associated Press writer Marcy Gordon contributed to this report.