Republicans in Congress and President Trump are actively exploring a new target in their ongoing campaign against the Affordable Care Act: the individual mandate.
For weeks, Trump has been pushing GOP legislators to include a provision repealing the mandate in their already-unwieldy tax reform package, and while the policy is not yet in the text of the bill, Republicans in the House and Senate are fighting to insert it. Should that fail, the Trump administration reportedly has an executive order in the works to dismantle as much of the mandate as possible—though he wouldn’t be able to completely eliminate it with a stroke of his pen.
Regardless of whether mandate is undermined by legislative or executive action, doing so would further roil the Affordable Care Act’s individual marketplace, which has already been kneecapped by a host of budget and policy changes this year. It would sow more chaos in an open enrollment period already hampered by misinformation public confusion.
Here are five points to keep in mind as the mandate becomes the next piece of Obamacare to come under fire:
Nixing the mandate would reduce the cost of the GOP tax plan
Republicans unveiled a tax plan last week that would increase the country’s deficit by nearly $1.5 trillion dollars, a sharp departure from years of campaigning on promises to cut the deficit. Though politically risky, including the repeal of Obamacare’s individual mandate would reduce a good chunk of those losses, saving the government more than $400 billion dollars over 10 years, according to an estimate last year by the Congressional Budget Office.
Rep. Mark Meadows (R-NC), the chair of the House’s influential hard-right Freedom Caucus, has been lobbying his colleagues to stick the mandate’s repeal into the bill to take advantage of those savings.
“If we put it in tax reform, you’ve got a pay-for right there, a very credible pay-for that’s consistent with what most Republicans want,” Meadows enthused to reporters last week. “Including it in tax reform seems like a very prudent thing to do.”
Millions more will be uninsured without the mandate
The federal budget savings from repealing the mandate, however, come at a steep price: the health insurance of more than 15 million Americans.
In a study last year, the non-partisan CBO found that repealing the individual mandate would drastically grow the number of uninsured over the next decade: “About 2 million fewer people would have employment-based coverage, about 6 million fewer people would obtain non-group policies (insurance people can purchase directly either in the marketplaces or from insurers outside the marketplaces), and about 7 million fewer people would have coverage under Medicaid. All together, the agencies estimate, 43 million people would be uninsured in 2026.”
Gary Claxton, a vice president at the Kaiser Family Foundation, told TPM that the people most likely to drop their insurance are younger and healthier—those who believe they don’t need health care—leaving the remaining risk pool sicker, older, smaller, and more expensive.
Insurers may react by fleeing the ACA marketplaces
Insurance companies already had to wrestle with President Trump’s abrupt decision to cancel the cost-sharing reduction payments the companies are owed under the Affordable Care Act—payments that go toward subsidizing the care of low-income patients with sever health needs.
Experts say eliminating or significantly rolling back the mandate, which guarantees insurers a more balanced pool of paying customers, would be another blow, and would push companies to either hike their 2019 rates or quit certain markets altogether.
“They may be willing to tolerate that risk,” Claxton told TPM. “But they may be concerned enough to say, ‘You know what? This isn’t worth it.'”
Katherine Hempstead, a health care expert with Robert Wood Johnson Foundation, noted that insurers already thought the mandate was too weakly enforced and had too many exemptions.
“This market is going to be even smaller and more adversely-selected than before,” she warned. “And insurer exits have already happened this year because of political uncertainty. They weren’t sure there was a good future in individual market.”
So far, the marketplaces have avoided any completely bare counties. But undercutting the mandate may spook enough insurers out of the exchanges to leave Obamacare users in some areas without any options at all.
Mandate threats add confusion to already chaotic open enrollment
The health advocacy groups that have taken up promotion of the law in light of Trump’s neglect have encountered a population deeply confused about the status of the law as open enrollment gets underway.
“There are only 45 days to enroll this year, and lot of people who just don’t realize that December 15 is the deadline will wait until January to enroll and be out of luck,” Erin Hemlin with the youth engagement organization Young Invincibles told TPM. She added there was confusion about the increases in premiums, the availability of tax credits.
“There is also a lot of confusion and intimidation about high premiums, and people don’t know what tax credits mean and what they’re eligible for. They don’t know that [cost-sharing reduction subsidies] are still available, and that plans might actually be cheaper than they were last year.”
Changing or eliminating the mandate in the midst of this, health experts warn, would exacerbate the problem, and possibly depress enrollment even further.
“If they want to cause further disruption, weakening the mandate would be one way to do that,” Joel Ario, the former director of the Office of Health Insurance Exchanges at HHS, told TPM.
Here come the lawsuits!
Some legal experts believe that an executive order gutting the mandate would invite yet another Obamacare lawsuit the Trump administration is facing, in addition to the others that have already been filed.
Nicholas Bagley, a professor at the University of Michigan Law School, says there are two possible routes, each with its own legal risks. The administration could either expand the list of possible “hardship exemptions” people can claim to get out of paying the penalty for not having health insurance, or Trump could simply order the IRS not to enforce the mandate.
“HHS has a lot of latitude, but not an infinite amount, when it comes to deciding what counts as a hardship,” Bagley explained. “It has to be a hardship with respect to people’s capability of obtaining a qualified health plan. They can’t saying buying a plan itself is a hardship. That won’t cut it.”
If Trump takes the non-enforcement path, Bagley added, “That would violate the President’s duty to take care that the laws of the country are faithfully executed. I don’t know that they would take a step so obviously contrary to law, but we can’t rule the possibility out.”
Insurance companies and possibly state governments would likely sue in court, arguing that the move harmed them by destabilizing the insurance risk pool.
Should lawmakers on Capitol Hill strike down the mandate, however, there is no legal recourse.
“Congress made the individual mandate, and they can unmake it,” Bagley said.
