The Congressional Budget Office (CBO) released a report on January 17 describing the consequences of passing H.R. 3762, also known as the Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015 that would repeal parts of the Affordable Care Act or Obamacare. The CBO is a non-partisan government agency that has the job of researching policy initiatives and their probable consequences for Congress.
If passed, H.R. 3762 would repeal the individual and employer mandates that respectively require citizens to buy health insurance or pay a penalty and require large employers to offer health insurance that meets certain standards. Two years later, H.R. 3762 would eliminate the subsidies provided to people who buy health insurance through the marketplace established by the ACA, and it would repeal the expansion of Medicaid eligibility.
On the other hand, insurers would still be required to provide specific benefits and amounts of coverage. They would still not be allowed to deny coverage or benefits based on pre-existing conditions.
Enacting H.R. 3762 would be disastrous. It would reduce the number of people ensured, and it would cause a sharp increase in premiums. The CBO estimates that 18 million people would lose their health insurance during the first year of enactment alone. People who bought individual policies, whether through a marketplace or an insurer, would be especially hard-hit; ten million of them would lose their coverage. In some cases, insurers would simply stop selling to individuals or working with the marketplaces. The CBO estimated that about ten percent of Americans would no longer be able to buy individual insurance.
Five million people currently covered by Medicaid would lose their coverage, and three million currently covered by group insurances would lose theirs.
Repealing the individual mandate would likely encourage the young and healthy to not spend money on health insurance. The older and less healthy would still buy health insurance. As insurers saw their profits decline, they would respond by raising their premiums by 20 to 25 percent.
Eliminating the subsidies and Medicaid expansions during the second year of enactment would make things even worse. Premiums would skyrocket by 50 percent in that year, and 27 million more people would lose their health insurance. By 2026, 59 million Americans under the age of 65 would lack health insurance – in contrast to the 28 million under the current law. The CBO expects enrollments to continue to decline and premiums to rise during this decade. Most of the people affected would be those who couldn’t buy public health insurance or couldn’t get health insurance through an employer.
The Republicans expect that repealing ACA will cut the annual deficit by 1.1 percent. They seem to believe that the country will not have to pay for the diseases and deaths of all those uninsured people in some fashion.
Trump has promised to replace the ACA with something even better that will cost less – but he has not provided any specifics about the replacement. He also claims that he plans to force drug companies to negotiate with the government about drug prices for people on Medicare and Medicaid, but he hasn’t provided any details about that either.