Senate Democrats are warning Republicans that a bipartisan deal to stabilize Obamacare wouldn't nullify the impact of repealing the law’s individual mandate, which requires everyone to have health insurance or pay a fine.
Senate Republicans added a repeal of the mandate to their tax reform legislation and have hinted at passing the stabilization deal alongside it. However, Senate Democrats have warned that the deal, which would make insurer payments for two years, would not be able to lessen the impact of higher premiums and coverage loss from eliminating the mandate.
The impact of the deal brokered by Sen. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., is being hotly debated as momentum to repeal the mandate gains steam. Sen. Lisa Murkowski, R-Alaska, who voted against a “skinny” repeal bill that would have gutted the mandate this summer, said on Tuesday that she is in favor of repealing the mandate.
Senate Democratic staff on the Health, Education, Labor and Pensions Committee sent their Republican counterparts a memo Monday outlining why the Alexander-Murray legislation isn’t enough.
The deal would restore funding for cost-sharing reduction payments to insurers that reimburse them for lowering co-pays and deductibles on low-income Obamacare enrollees. In exchange, states would have more flexibility under Obamacare.
The memo leans heavily on an estimate from the nonpartisan Congressional Budget Office that predicts 13 million people would forego insurance over a decade. Repeal would save about $330 billion over a decade, money that Republicans plan to use to expand the child care tax credit and other cuts.
“CBO estimates that Alexander-Murray wouldn’t have any impact on the number of people who purchase coverage,” the memo said.
It also pointed to an estimate from CBO and the nonpartisan Joint Committee on Taxation that repealing the mandate without a replacement would raise premiums by 10 percent on the individual market, which includes Obamacare’s exchanges.
The effect of repealing the mandate is a major point of contention among experts.
Standard & Poor’s predicted a much smaller effect than CBO did. It estimated that about three to five million people would not get insurance and repeal would save only up to $80 billion.
Experts disagree over the impact of repealing the mandate, with some saying that it could destabilize markets by removing an incentive for younger and healthier people to sign up for coverage. Others counter that high premiums already have forced healthy people to leave the market, since the cost of insurance goes well beyond the cost of paying the penalty.