A bipartisan deal to spend billions of dollars to reimburse Obamacare insurers won’t change the impact of repealing the individual health insurance mandate, which will lead to premium spikes and coverage losses, according to the nonpartisan Congressional Budget Office.
The estimate was released Wednesday, a day after President Trump told senators he would support a separate bill to continue subsidies for Obamacare insurers if the GOP tax bill includes language zeroing out Obamacare’s individual mandate penalties, which would effectively end the requirement for people to buy health insurance.
Democrats have repeatedly said that the deal on subsidies, brokered by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., won’t help offset the effects of ending the individual mandate. The deal would make payments to Obamacare insurers for two more years to reimburse them for lowering copays and deductibles for low-income Obamacare customers, in exchange for giving states more latitude to waive Obamacare insurer regulations.
Obamacare insurers have said that without the payments, they will make up the required cost of lowering out-of-pocket costs for low-income enrollees by raising premiums for everyone. President Trump halted the payments, which he previously derided as a “bailout,” last month.
The CBO found that making the payments wouldn’t prevent an estimated coverage loss of 13 million people over the next decade and premium hikes of 10 percent over the next decade of the mandate is repealed.
The CBO did not look into the impact of a bill from Sens. Susan Collins, R-Maine, and Bill Nelson, R-Fla., that gives states $4.5 billion in reinsurance funding to states. Reinsurance gives funding to insurers to lower the costs of the sickest medical claims, leading to lower premiums.
The CBO estimate gives Democrats ammunition to bolster their claims that Alexander-Murray won’t help offset the mandate repeal.
“If there was ever any doubt, it is now abundantly clear that the bipartisan legislation… Alexander and I agreed on will not protect families from the Senate Republican plan to sabotage families’ healthcare,” Murray said in a statement Wednesday.
Bipartisan agreements have been key to getting support for tax reform from centrist holdout Collins. She told reporters Tuesday that she can understand the reason for getting rid of the mandate, but called for legislation such as her bill with Nelson and Alexander-Murray to nullify the impact of losing the mandate.
Insurers have argued that repealing the mandate could destabilize the individual market, which is used by people that don’t have insurance through a job or the government and features Obamacare’s exchanges. They say the mandate is needed as an incentive to get younger and healthier people to sign up for insurance and offset claims from sicker individuals.
But the impact of the mandate is a subject of some debate even within CBO. The agency has said it is looking into its methodology for determining the insurance impact from repealing the mandate, but a result isn’t likely until next year.
Meanwhile, the financial analysis firm Standard & Poor’s estimated that repealing the mandate would only lead to about three to five million people going without insurance over the next decade.
