WASHINGTON (Reuters) - The Congressional Budget Office said on Wednesday that repealing the Obamacare individual mandate would increase the number of uninsured by 13 million by 2027 and reduce the federal budget deficit less than initially forecast.

FILE PHOTO: A sign on an insurance store advertises Obamacare in San Ysidro, San Diego, California, U.S., October 26, 2017. REUTERS/Mike Blake/File Photo

The CBO, the nonpartisan budget-scoring agency, said that eliminating the Obamacare mandate that all Americans purchase health insurance or else pay a fine would lower the deficit by $338 billion over the next decade, not $416 billion as it estimated in December.

The agency found that health insurance premiums would rise by about 10 percent in most years over the next decade in the individual market created by the Affordable Care Act, former Democratic President Barack Obama’s signature domestic policy achievement. It noted that markets in most areas of the country would remain stable.

President Donald Trump and some Republicans favor including a repeal of the mandate in tax overhaul legislation. But lawmakers, Republican aides and lobbyists have said it would be difficult to include a repeal in a tax effort complicated by intraparty differences and intense business lobbying.

The U.S. House of Representatives unveiled its tax plan last week, and the Senate’s plan is expected to be released on Thursday.

The individual mandate is a central tenet of Obamacare that health policy experts and proponents say is essential to making the law work. It compels young and healthy people to join health insurance markets and help lower premiums by offsetting the costs of sicker patients.

Americans must note on their tax returns whether they have health coverage.

Yet it has proved to be among the most controversial portions of the law as Republicans, who say Obamacare is too expensive and an example of government overreach, argue that the federal government should not be able to require people to buy health insurance if they do not want it.

The CBO said in its December report that the individual mandate increases the federal deficit by encouraging people to buy subsidized coverage, either through Medicaid, the government health insurance program for the poor and disabled, employer-provided plans, or through the Obamacare individual health insurance market.

Eliminating the mandate would lower the deficit by reducing federal spending on subsidized health insurance coverage, it said.

The CBO said abolishing the requirement would cause premiums to rise because healthier people would be less likely to purchase insurance. It found that the resulting increases would cause more people to forego insurance.