Senate Republican leaders have proposed repealing the individual mandate as required by the Affordable Care Act (ACA) by incorporating a provision into the latest version of their plan, which was released late Tuesday night.
Senators say eliminating the individual mandate would give them more than $300 billion over 10 years for their proposed tax cuts. Eliminating the mandate, which requires nearly all Americans to have health insurance or pay a penalty, would likely destabilize the insurance marketplace with approximately 4 million fewer people being covered in the first year the repeal would take effect, according to figures released by the Congressional Budget Office last week. Overall, the number would rise to 13 million uninsured by 2027, as compared to current law. Meanwhile, premiums would increase by approximately 10% in most years of the decade.
Senators would apply the new revenue to make permanent the 20 percent corporate rate; doubling the child tax credit to $2,000; and expanding access to a deduction for pass-through businesses. However, the updated bill sunsets individual rate cuts at the end of 2025 to help the package comply with strict budget rules.
Critics argue that repealing the mandate would remove the provisional authority that the ACA has to convince younger and healthier Americans to sign up for coverage. While experts have mixed views on how effective the mandate has been, many feel that removing it would cause the insurance marketplace to shift more towards sicker and older consumers. That would likely result in insurers rethinking their participation in the exchanges, especially since they would still be required to cover those with pre-existing conditions and not charge them more based on their medical history.
As it relates to tax exempt bonds in the Senate version of the Tax Cuts and Jobs Act, SDAHO has joined with others to urge the Senate Finance Committee to maintain the exemption for private activity bonds and access to advance refunding bonds. Republican and Democratic senators have significant differences related to the recent proposed changes, however the legislation is being fast tracked with votes expected in both chambers of congress later this week.