Weighing The Impact Of Repealing The Health Insurance Mandate

The tax bill being considered by Congress includes a repeal of the Affordable Care Act's individual mandate. Julie Rovner of Kaiser Health News talks to guest host Ray Suarez about how that could affect the health insurance market.

RAY SUAREZ, HOST:

We're going to continue our conversation about the Republican tax bill and focus on specific provisions in the bill affecting health care. As we just heard, the bill will repeal what's called the individual mandate, a key part of the Affordable Care Act that requires people to buy health insurance or face a tax penalty. To understand what effect this could have on the insurance market, we're joined now by Julie Rovner, Washington correspondent for Kaiser Health News. Good to have you with us, Julie.

JULIE ROVNER: Nice to be here.

SUAREZ: So what would be the most immediate effect of the repeal?

ROVNER: Well, the most immediate effect is that people will be confused because they're actually repealing the penalties but not until 2019. So for next year, people will still be required to either have health insurance or pay a penalty. And, of course, yesterday was the end of open enrollment for most people in most states.

SUAREZ: Now, when people leave the insurance market, it must have some effect on the numbers that are very, very carefully balanced for this law to work.

ROVNER: That's right. That's the biggest concern that insurers have. Insurance - said when the Affordable Care Act was passed, that if you're going to require us to accept sick people and not to charge them more, you're going to have to have some way to get more healthy people into the pool. That's what this mandate penalty was about. Insurers said at the beginning it wasn't big enough. And, in fact, it hasn't really driven that many healthy people to sign up. But there is a concern that if you take it away and don't replace it with anything - and at the moment there is no replacement in this bill - that literally only sick people will buy insurance. The only response for insurers at that point is either to raise premiums dramatically or to drop out altogether.

SUAREZ: One senator for whom the repeal of the mandate had been a sticking point was Republican Susan Collins of Maine. Originally, she noted that repealing the mandate would have consequences for the future stability of the individual market. Now, she says she'll back the tax bill if Congress acts on other health measures. What are they?

ROVNER: Well, there's two. And one of them would restore these payments that the president cut off last fall that go to insurers to reimburse them for discounts they have to give to their lowest-income enrollees on the exchanges. They're called cost-sharing reduction payments. But basically, the insurers have already figured out how to get that money back. They've raised premiums strategically, and that made premium subsidies higher. So basically, the federal government is giving them back the money in other ways. So most analysts think that it's probably too late for that to help.

The other thing that Susan Collins asked for was a reinsurance pool. That would help insurers pay for their sickest customers. Most analysts think that would help but that the money that's being talked about is probably not enough. Also, it's not entirely clear that they could get this through the House even if they can get it through the Senate.

SUAREZ: The tax bill, it's understood widely, will increase the deficit. The argument is about how much, but that means entitlement programs may be under some pressure. Do we know how the bill could affect Medicare?

ROVNER: Yes, we do. Medicare could be cut by billions of dollars. That can be waived by Congress but it takes 60 votes. The Republicans assume the Democrats will come along because they don't want cuts to Medicare, which the Democrats don't. But Democrats are warning that they may play hardball on this and that Republicans should not assume that they're going to vote to waive these cuts which are automatic if the deficit is raised to the extent it would be by this tax bill.

SUAREZ: Julie Rovner is Washington correspondent for Kaiser Health News. Julie, thanks for joining us.

ROVNER: You're most welcome.

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