The Republican Tax Plan Is A Stealth Repeal Of Obamacare

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The Republican Tax Bill will take healthcare away from 13,000,000 Americans.

Tucked inside the Tax Cuts and Jobs Act, a bill currently under consideration in the Senate, is a provision that will undermine Obamacare markets and effectively unravel the program altogether: repeal of the individual mandate. Much has been written about this provision - Democrats are against it, while Republicans call it freedom to choose - but revoking the requirement that individuals buy insurance will see millions of Americans lose their insurance.

The Tax Cuts and Jobs Act, as being considered in the US Senate, repeals Obamacare’s individual mandate. That change, according to the Congressional Budget Office, would cut $338 billion over 10 years from Medicaid and insurance subsidies and lead to 13 million fewer people having health coverage. That will, according to the best evidence we have, lead to an increase in preventable deaths on the order of 15,600 people per year.

Repealing the mandate could easily result in what is called a "death spiral":

healthy people flee the individual health insurance market en masse, leaving the remaining customers to just be less healthy or older people, who’d then face huge premiums. They’d get some help from Obamacare’s insurance subsidies, which would remain and cap premiums as a share of income for low- and middle-income people. But even that might not be enough to make the plans affordable. And if enough people quit, then insurers could stop offering plans in some areas altogether.

Though various proposals have been floated in an attempt to mitigate such a collapse, in the end, Republicans need to repeal this mandate in order to save the government money.

If you replaced the mandate with something that actually worked, that actually succeeded at getting as many or more people to sign up for coverage, the CBO would score that as not saving money, perhaps even as costing money. Repealing the mandate saves money by reducing health coverage. Less health coverage means less Medicaid and insurance subsidy spending by the federal government.

Put another way: Either the Senate tax bill kicks millions of people off insurance or it costs $338 billion more than its supporters say it does.