The Senate’s ongoing debate of plans to repeal and/or replace the Affordable Care Act (ACA) has resulted in two separate Republicans plans being voted down. One hope for the party is to pass a so-called “skinny repeal” which eliminates the individual and employer mandates along with a medical device tax, but that approach would have an immediate impact on insurance coverage and premiums.
The Congressional Budget Office (CBO) issued a report not on the full legislation—which hadn’t been written yet—but on the few provisions this bill would reportedly include. If passed, the CBO said 16 million fewer people would have health insurance by 2026. Premiums would increase by an average of 20 percent on the individual market.
The American Medical Association is opposed to the idea, saying it “leads to adverse selection that would increase premiums and destabilize the individual market.” The Blue Cross Blue Shield Association said there must be some incentive for people to maintain insurance coverage if the mandates are eliminated.
New York and Washington tried a similar approach of requiring insurers to accept all customers without coverage mandates. As POLITICO summarized, both states saw their insurance market go through a “death spiral,” with Washington losing all individual market insurers four years after eliminating its individual mandate. A key difference would be the ACA’s subsidies for buying insurance, which would shield many customers from the premium increases, but greatly increase federal spending and leave those ineligible for tax credits unprotected from steep rate hikes.
The failure of other healthcare bills, however, has Republican leaders pressuring rank-and-file legislators to support “skinny repeal” to get some sort of legislation into a conference committee with the House, where the bill would be changed significantly. HHS Secretary Tom Price, MD, encouraged this strategy in an interview with CNBC.
“What we need to do in the Senate is figure out what the lowest common denominator is, what gets us to 50 votes, so we can move forward on healthcare legislation,” Price said. “Legislation is one step at a time. And so we'll see what the next step is and move on from there.”