Repealing Individual Mandate Would Hurt, Not Help, Low- and Moderate-Income People
Some Republican senators claim that repealing the Affordable Care Act (ACA) mandate that people have health insurance or pay a penalty -- as
The Republican claims ignore the increases in the number of uninsured that repealing the mandate would cause.
* Repeal would save
* The millions of low- and moderate-income people losing health insurance would be harmed.
* What's more, many of the coverage losses that result from repealing the mandate would occur because the mandate serves an important outreach function: it leads uninsured people who don't realize that they're eligible for marketplace subsidies or Medicaid to explore their options and enroll. Coverage losses that come because people never learn about programs or financial assistance for which they're eligible aren't "voluntary" in any meaningful sense.
* Overall, low- and moderate-income people would lose much more than they'd gain from repeal. CBO estimates that repealing the mandate would reduce penalty payments from people (at all income levels) who failed to enroll in coverage by
Consistent with that, JCT estimates show that households with incomes under
The Republican claims also ignore the millions of mostly middle-income Americans who would face higher premiums or other cost increases as a result of repealing the mandate.
* Without the mandate, fewer healthy people would sign up for coverage, causing individual market premiums to rise by about 10 percent to cover the costs of a less healthy insurance pool, according to CBO. That amounts to a premium increase of hundreds of dollars per year for millions of mostly middle-income consumers -- and over
* Uncompensated care would increase, raising costs for taxpayers and for people with health insurance, including those with employer coverage. Many of those who would become uninsured due to repeal would ultimately get seriously ill or injured and seek care, but would be unable to pay for it. Other participants in the health system would (involuntarily) pay for their care. That increase in uncompensated care costs could force some providers to close their doors or cut spending in ways that undermine quality of care. Providers might also raise prices, shifting costs to people with private coverage. Or, states or the federal government might have to step in to cover some of these uncompensated care costs, shifting costs to taxpayers.
In addition, the 2015 data that some Republican senators cite on penalty payments by low- and moderate-income consumers may already be out of date. In the early years after the mandate and the ACA's coverage expansions took effect in 2014, many low- and moderate-income people were unaware of both the financial assistance and the individual mandate exemptions they qualified for. That situation has likely improved, although the Administration's cuts to marketplace outreach have slowed progress.
* Most low- and moderate-income uninsured Americans can get coverage for less than the cost of the penalty, thanks to financial assistance. Among uninsured people subject to the penalty whose incomes are below 400 percent of the poverty level (about
* Many low-income uninsured people -- including those who are uninsured because their state hasn't expanded Medicaid as it can under the ACA -- are eligible for exemptions. At least 2.5 million uninsured adults, including 1.2 million workers, are ineligible for Medicaid because their state hasn't adopted the expansion. While people in the "coverage gap" -- those with incomes below 100 percent of the poverty line who aren't eligible for either Medicaid or premium tax credits -- are exempt from the mandate, many low-income people didn't know about this option and assumed they owed penalties in 2014 and 2015. The
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House Natural Resources Committee Issues Testimony From Gov. Rossello
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