Repealing Affordable Care Act Mandate Could Save $338 Billion: CBO

Tax bill writers search for pay-fors

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Rolling back Affordable Care Act requirement that all Americans have health insurance could save the U.S. $338 billion over 10 years, according to the Congressional Budget Office (CBO).

That’s a smaller benefit than previously projected for a plan favored by the White House.

Republicans are considering repealing the coverage rule in the ACA as a way to pay for far-reaching changes in the tax code. The mandate repeal pay-for savings would come from the government spending less to subsidize Obamacare plans as more people opt to forgo health coverage.

(Related: Cruz Pressing to Include Affordable Care Act Mandate Repeal in Tax Bill)

The estimate is a preview of a report the nonpartisan CBO plans to release later Wednesday.

While ending the mandate could free funds up for a tax overhaul, it would also leave more people without health insurance: CBO estimated in December that 15 million more people would be uninsured if the mandate was ended, and premiums would increase 20%. The agency is expected to provide an updated coverage estimate Wednesday.

The mandate is meant to spread risk evenly among healthy and sick people to help keep overall costs down. Without it, healthier people could buy cheaper plans that don’t meet ACA coverage requirements, while those who need care, such as people with pre-existing medical conditions, will face rising costs.

Concerns about coverage losses doomed a Senate bill that would have ended the mandate while leaving other parts of the ACA intact, known as “skinny repeal,” in July.

The CBO said in December that overturning the individual mandate would save $416 billion between 2018 and 2026. The agency’s $338 billion savings estimate assumes the mandate would be repealed in 2019 and applies to the years 2018 to 2027. The CBO said that it is revising its methods for calculating the effects of repealing the mandate but isn’t including major changes in this analysis.

The United States spends a total of about $4 trillion per year, and about $x trillion per year on health care-related expenditures of all kinds.

President Donald Trump backed overturning the mandate in a tweet last week, pushing for the savings generated to be used “for further Tax Cuts.” House Speaker Paul Ryan said on “Fox News Sunday” that GOP leaders are considering the idea. The House Committee on Ways and Means started debate Monday on the tax bill, called the Tax Cuts and Jobs Act.

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