GOP’s Strategy for Killing Obamacare

The mandate to buy health insurance is the main part of Obamacare which is the part that you have to accept if you want the goodies, such as affordable coverage of people with costly pre-existing conditions. Now the Senate Republicans are saying you do not have to go for the main part mandatorily anymore. They eliminate the fine for lack of coverage in their version of the 1.5 trillion dollars tax cut bill, which they aim to vote on after Thanksgiving. The health care economists describe the mandate as a necessary evil and they think that the removal of penalty which effectively kills the individual mandate possibly makes sense. Without it, they say that the healthy people will roll the dice and prefer to go uncovered, leaving insurance pools made up of sicker, older people who are much costlier to cover. But the impact of the requirement is regressive. The families that are well to do, generally get health insurance through their employers and hence those who pay the tax for non-coverage tend to be poorer which forces them to go for two or three jobs to make ends meet.

For the Senate Republicans, the killing of the individual mandate is a beautiful twofer. Firstly, it is a way to limit the red ink from their tax package. The Joint Committee on Taxation has estimated that the ending of the mandate would save about 318 billion dollars over 10 years, because the people who dropped coverage would not be getting subsidies and the savings would continue after 2027. This is very crucial because under the Byrd rule, a measure can pass the Senate with a simple majority only if it does not add to deficits beyond 10 years. Secondly, the gutting of the mandate would partially fulfill the objective of the Republicans that was long standing of entirely getting rid of Obamacare. The downside for the Republicans is that this particular repeal gambit has breathed new life into the coalition of pro-Obamacare which argues that the Republicans are financing cuts in the rate of taxes for the rich by reducing the number of people with health insurance. Ben Wikler who is the Washington director of MoveOn.org, a liberal activist group says that the addition of ACA repeal to the corporate tax giveaway has raised the flames of resistance into a roaring uncontrollable fire. On the 8th of November, the Congressional Budget Office said that the repealing of the mandate would increase the number of uninsured Americans by 13 million and raise premiums by ten percent in most of the years of the decade to come.

December 16, 2017 - 03:57
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