:format(webp)/cdn.vox-cdn.com/uploads/chorus_image/image/55876045/822308366.0.jpg)
The Senate on Tuesday is expected to bring to the floor a “skinny repeal” bill that would repeal Obamacare’s requirement to purchase insurance — and violate the health care promises that Republican leaders, including Trump, have spent more than seven years making.
Skinny repeal would eliminate the health care law’s individual mandate as well as a tax on medical device makers. Dylan Scott has a more thorough explainer on the policy here.
When Republicans campaigned on health care, they would promise to “replace” Obamacare with a better plan. This plan, they said, would have lower premiums and more choices for consumers. President Trump went as far as to promise it would cover all Americans.
“Skinny repeal” would do none of that. It would make premiums go up, not down. Insurance competition would decline as insurers worried about healthy Americans fleeing the individual market. Rather than all Americans gaining coverage, millions would lose the plans they currently rely on.
Skinny repeal would cause premiums to rise and competition to decline in the individual market
The individual mandate is a critical part of the Affordable Care Act. The requirement that all Americans purchase coverage or pay a penalty is meant to encourage healthy people to buy insurance.
The mandate makes it expensive to gamble on going uninsured — and nudges those who don’t plan to use much medical care to purchase a policy anyway. This helps hold down premiums for those with higher medical bills (my colleague Alvin Chang has a great visual explainer on how this works in practice).
The individual mandate is the most unpopular part of the Affordable Care Act. It polls quite poorly and has been under constant attack since the health law passed, including a 2012 legal challenge that went all the way to the Supreme Court.
Obamacare would look significantly different without the individual mandate. It would cover several million fewer people.
When the Congressional Budget Office analyzed a bill similar to skinny repeal, which also rolled back this provision, it estimated that 15 million Americans would lose coverage. The agency estimated that “repealing the individual mandate would also result in higher health insurance premiums” for those who purchase their own coverage — by approximately 20 percent.
The CBO expects that healthy people would not enroll nearly as much as they do under current law, in the event of mandate repeal. This would raise premiums for those left in the individual market, as insurers would still be required to cover anyone who applies:
Insurers would still be required to provide coverage to any applicant, would not be able to vary premiums to reflect enrollees’ health status or to limit coverage of preexisting medical conditions, and would be allowed to vary premiums by age only to a limited degree. Those features are most attractive to applicants with relatively high expected costs for health care, so the agencies expect that repealing the individual mandate would tend to reduce insurance coverage less among older and less healthy people than among younger and healthier people.
Republicans have long warned of an “Obamacare death spiral,” where only sick people enroll in coverage and premiums go up and up. Passing the skinny repeal plan would make that outcome significantly more likely.
What’s more, repealing the individual mandate would likely scare many health insurers out of the individual market or cause them to significantly raise their premiums.
Republicans are right when they say the Obamacare marketplaces are fragile (some Democrats will even admit this too). There are currently 38 counties where zero plans are signed up to sell coverage in 2018.
:format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/8910843/2017_providers__7_.png)
There are policies that will encourage insurance plans to keep selling coverage in those fragile areas. The Trump administration even supports some of them! It approved, for example, an Alaska plan to create a fund to offset really high-cost patients, and will send the state $48 million to build it.
But there are polices that will encourage insurance plans to quit the individual market — and repealing the individual mandate is right at the top of that list.
Skinny repeal doesn’t replace Obamacare. It just creates an individual market that doesn’t work very well.
In the first few years after the Affordable Care Act’s passage, there was a debate within the Republican Party: Should we just repeal Obamacare, or do we need to replace it with something else?
At first, repeal seemed like a viable option. Obamacare passed in 2010, but its coverage expansion didn’t begin until 2014. That was a four-year window where it seemed feasible to wipe the law off the books before its major provisions took effect.
In 2014, though, the tide turned — and most Republican legislators became convinced that repeal now had to come with “replace,” some plan to offer the millions of Americans who had come to rely on the Affordable Care for coverage.
For years now, this has been the Republican message: repeal and replace. Get rid of Obamacare and replace it with something. It’s been the message in the Senate too, up until this week.
“I don’t think that it’s a responsible way to repeal something, have everything fall off a cliff … and have no plan in front of us,” Sen. Shelley Moore Capito (R-WV) has said. “I don’t think the US Congress does too well with deadlines. I don’t think that’s when good policy comes forward.”
Donald Trump promised to “repeal and replace” Obamacare, and so did Mitt Romney in his 2012 presidential run. The skinny repeal bill is a violation of those promises, overhauling the individual market without any replacement at all. It creates the “cliff” Capito describes — with no plan to catch those who fall off it.
