Repealing Obamacare’s individual mandate would lead to 13 million people going without insurance and reduce deficits by $338 billion over the next decade, according to a report from the nonpartisan Congressional Budget Office.
The CBO projected on Wednesday that 4 million people would go without insurance next year if the mandate were repealed. Republicans are considering adding repeal of the mandate penalties, which force everyone to buy health insurance, to their tax reform legislation.
The CBO said Wednesday morning that repealing the mandate’s penalties for not having insurance would save the government $338 billion over the next decade, which Republicans can use to help fund tax reform.
Even though 13 million fewer people would have insurance compared to current law, CBO didn’t think that repealing the mandate would damage the individual market, which includes Obamacare’s exchanges.
Insurers have often said that repealing the mandate would remove a key incentive for younger, healthier people to sign up for Obamacare. That would mean only sick people would sign up for coverage and further deteriorate the law’s risk pool, which would drive up premiums.
CBO said that average premiums on the individual market, which is used by people who don’t have insurance through their employer or the government, would increase by about 10 percent annually during most of the decade.
“Those effects would occur mainly because healthier people would be less likely to obtain insurance and because, especially in the nongroup market, the resulting increases in premiums would cause more people to not purchase insurance,” CBO added.
The estimate comes as CBO said it is revisiting its methodology around the repeal of the individual mandate. Republicans have criticized the CBO for putting too much weight on the mandate because it hasn’t led to a major influx of people signing up for Obamacare’s exchanges.
CBO Director Kevin Hall said in a blog post Wednesday that because work on the new changes is not complete, it would not be be incorporated into the full report on the mandate repeal.
The report comes as Republicans try to decide whether to include a repeal of the individual mandate penalty in their tax legislation. The House’s original bill, announced last week, did not include it. The Senate is expected to release its own bill Thursday morning.
Conservatives and President Trump have called for including the repeal, but other Republicans have been skeptical that it could be a distraction from tax reform. Republicans worry that it could doom the chances of tax reform in the Senate, which failed to repeal Obamacare several times this summer.
Rep. Mark Meadows, R-N.C., chairman of the conservative House Freedom Caucus, told the Washington Examiner Tuesday he doubts mandate repeal will be added to the House version of tax reform. However, he said that it could wind up in the final version.
The House Ways and Means Committee is in the middle of a four-day markup of the tax bill expected to conclude Thursday.
