Q: How did "Obamacare" wind up in the tax bill?
A: The Senate version repeals the Affordable Care Act's tax
penalties on people who don't have health insurance. That would
result in government savings from fewer consumers applying for
taxpayer-subsidized coverage, giving GOP tax writers nearly $320
billion over 10 years to help pay for tax cuts.
What's more, repealing the fines would deal a blow to the
Obama-era health law after a more ambitious Republican takedown
collapsed earlier this year.
Q: Those fines have been very unpopular, so how could repealing
them undermine the health law? Other parts of the ACA will remain on
the books.
A: Premiums will go up, and that's never popular. The fines were
meant to nudge healthy people to get covered. Because insurance
markets work by pooling risks, premiums from healthy people subsidize
care for the sick.
Without some arm-twisting to get covered, some healthy people will
stay out of the pool. That's likely to translate to a 10 percent
increase in premiums for those left behind, people more likely to
have health problems and need comprehensive coverage, says the
Congressional Budget Office.
The CBO also estimated that 13 million more people would be
uninsured in 2027 without the penalties. If they have a serious
accident or illness, uninsured people get slammed with big bills, and
taxpayers wind up indirectly subsidizing the cost.
Q: So just taking away an unpopular penalty would destabilize the
health insurance law?
A: Repealing the fines is part of a broader context. -
Q&A: Tax bill impacts on health law coverage and Medicare, Newser, 12/05/2017
Link to the entire article appears below:
http://www.newser.com/article/4729348d72844801ae4686e91afbb1fb/qa-tax-bill-impacts-on-health-law-coverage-and-medicare.html
“There are powerful reasons to kill ObamaCare's individual mandate to buy health insurance. This regressive tax has fallen primarily on modest earners who face a choice of paying a fine or buying the cheapest $7,000-deductible plan, which may be of little use until long after their finances are in distress.
Yet how the individual mandate is eliminated makes all the difference in the world. If done while easing up on ObamaCare's counterproductive rules — from the employer mandate to coverage options that have led just as many people to leave subsidies on the table as to claim them — getting rid of the mandate could facilitate a big step toward universal coverage.
But getting rid of the mandate in the way Republicans propose, as a $300 billion pay-for that will help keep the cost of tax legislation under the $1.5 trillion maximum allowed under Senate rules, would not only ensure that millions of people drop their insurance on top of the 28 million already uninsured, but it would deepen already-daunting fiscal challenges and seriously undermine any hope of fixing our troubled individual insurance market for the foreseeable future.
Understanding the true impact of repealing the individual mandate is necessary for making sense of the Joint Committee on Taxation's official score of the Senate tax legislation. Because millions of individuals would give up their health insurance tax subsidies, JCT found that households earning up to $40,000 a year would face an ever-larger tax hike equal to $6.4 billion in 2021 alone (or a $4.4 billion tax hike once the effect of the corporate tax cut is considered).
Republicans say, in essence, "No harm, no foul." If people are voluntarily dropping coverage, that hardly amounts to a tax increase. Yet the GOP argument that people would be giving up coverage they don't want, while technically true, depends on a flawed presumption that all those millions of people with modest incomes would reject health insurance, not because of a lack of affordability, but because they would prefer to be uninsured.
Just consider a scenario in which people were able to use their available health insurance subsidy to cover the full cost of a high-deductible or catastrophic health insurance policy and have at least $200 left over for a Health Savings Account deposit — $100 of which could be cashed out if left unspent at year end.
If there were this kind of flexible option that included free cash on the table, the word would get out and there likely wouldn't even be any need for advertising to get close to 100% enrollment among the subsidy-eligible group.
While this hypothetical isn't necessarily an ideal model, it is eminently possible to combine the health care security Democrats insist upon with the freedom that Republicans believe in, killing the mandate while dramatically reducing premiums and continuing to provide moderate-income households ample reason to get covered instead of rolling the dice.
The key point is that every dollar of the projected savings from killing the individual mandate depends on keeping ObamaCare just as consumer unfriendly as it was in 2017. In other words, taking those savings – all that extra tax revenue lying around because even more people leave their health insurance tax credits unclaimed — and applying it to tax cuts means that a significant chunk of the funding now available for health insurance premium tax credits will essentially disappear, all but ruling out consumer-friendly and coverage-increasing reforms of the ACA in a fiscally fraught future.” - The Right Way To Kill ObamaCare's Individual Mandate, Investor’s Business Daily, 11/28/2017
Link to the entire article appears below:
https://www.investors.com/politics/policy-analysis/the-right-way-to-kill-obamacares-individual-mandate/
Note: Yet another interesting demand-side argument. However, “affordability” of healthcare and hence the price of health insurance is a supply-side and demand-side phenomena. Moreover, health insurance price is, in the main and upon normal occasion, a reflection of the price to supply healthcare. The constant stream of demand-side arguments is going to do little to affect the supply-side price. More importantly, the supply-side price is not strictly a result of market forces as much as it is a function of special interest legislation and certificate of need (CON) legislation providing the conduit of distorted price and limited competition that the providers within the greater supply-side enjoy at the expense of the consumer of healthcare.
