Now that Senate Republicans have formally decided to add repeal of Obamacare’s individual mandate penalties to the tax bill, we’re going to be hearing a lot more about the Congressional Budget Office’s estimate that 13 million more Americans would be uninsured. But it’s important to keep in mind that this doesn’t mean that all 13 million will lose coverage.
The 13 million cited by the CBO fit into several different categories. Among them are 5 million Medicaid beneficiaries and 2 million workers who would decline offers of employer coverage. Because repealing mandate penalties would not change Medicaid eligibility, meaning that anybody who didn’t sign up would still qualify, and could be signed up if they ever needed medical care. Similarly, repealing the mandate penalties would not mean that those employees would lose their offer of coverage. So, right off the bat, at least 7 million of the 13 million would not really be losing any coverage.
An additional 5 million would be uninsured on the individual market, according to the CBO, which writes, “Those effects would occur mainly because healthier people would be less likely to obtain insurance and because, especially in the nongroup market, the resulting increases in premiums would cause more people to not purchase insurance.” (The numbers don’t add up to 13 million, because of rounding.)
So, this category is divided into two subcategories. Those who don’t want to buy health insurance if they aren’t penalized aren’t victims of repeal of the mandate, they are choosing to go uninsured. The next subcategory is those who would be discouraged from purchasing insurance because premiums would rise if healthier people left the market. That is the one group of people who could arguably be said to be losing insurance if the mandate is repealed. We don’t have an exact breakdown of those two subcategories, but we can confidently say that the number in the second category is somewhere south of 5 million.
What’s clear is that we can’t lump in all the 13 million together. Those who are priced out of the market due to a premium hike resulting from the individual mandate penalties being repealed are in a different boat from those who could sign up for Medicaid whenever they want.
Also, it’s worth noting that 6.5 million people paid a penalty averaging $470 for not purchasing health insurance, and they would be clearly better off if those penalties were eliminated.