WASHINGTON — For years, the Obama administration said the health care system as constructed by the Affordable Care Act could not survive without a mandate that most Americans have health insurance. With surgical precision, the sweeping tax bill that Republicans plan to pass this week will do away with that mandate.
What comes next for health care is unclear.
The demise of the Affordable Care Act’s mandate will lead to higher premiums and lower enrollment in plans sold on the health law’s marketplace, Wendy K. Mariner, a professor of health law at Boston University, said Monday. But she added, “I don’t think we can say with any confidence” how much premiums will rise or coverage will decline.
The Republicans’ move came as something of a surprise. Democrats rejoiced when they defeated multiple Republican efforts to dismantle the health law this year. But Republicans have never wavered in their opposition to the mandate, which they see as a symbol of government overreach.
Democrats enacted the mandate, and President Barack Obama defended it all the way to the Supreme Court. But he knew it was unpopular, and his administration was not keen on enforcing it.
The mandate has been enforced with “a muffled bark and a toothless bite,” said Thomas P. Miller, a health economist at the American Enterprise Institute and a critic of the law.
Insurance companies and Democrats in Congress find themselves in rare agreement, predicting that premiums will soar and insurance markets will swoon if the government can no longer threaten people with tax penalties for going without health insurance. The Congressional Budget Office estimates that repealing the mandate penalties would increase premiums by 10 percent and leave four million more people uninsured in 2019 and 13 million more uninsured by 2027.
Remarkably, after the millions of words written by lawyers to attack and defend the mandate in court, the tax bill wipes it out with just two sentences. The penalty is either a flat dollar amount, $695 for an adult, or 2.5 percent of household income above a certain threshold, whichever is greater. The tax bill slices the penalty to “$0” and “zero percent,” starting in 2019, relieving taxpayers of $43 billion in penalties they would otherwise pay through 2027, the budget office says.
