Health Care

How Nixing The ACA's Individual Mandate Could Affect Federal Deficit

The Congressional Budget Office's new estimates show eliminating the Affordable Care Act's individual mandates has costs and benefits.

How Nixing The ACA's Individual Mandate Could Affect Federal Deficit
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Getting rid of the Affordable Care Act's individual mandate could reduce federal budget deficits by about $338 billion by 2027 — but that savings still comes at a cost.

According to the Congressional Budget Office's new estimates, deficits would shrink compared with the current law. But it also says repealing the mandate would lead to 4 million fewer people insured in 2019 and 13 million fewer in 2027.

CBO says average premiums in the nongroup market would also increase by about 10 percent "in most years of the decade."

The CBO's previous estimate from December predicted repealing the mandate would reduce the deficit by $416 billion and would lead to about 16 million fewer Americans insured in 2026.

The differences stem from a couple things: Healthier people would be less likely to buy insurance and, in turn, higher premiums would turn off even more people.

In tweets from Nov. 1, President Donald Trump suggested lawmakers repeal the mandate as part of the tax reform effort. If that doesn't happen, the White House reportedly has a backup executive order to weaken the mandate.

That said, the Affordable Care Act — including the individual mandate — is still the law of the land. The IRS requires people to say if they had health insurance all year. If they say they didn't, they could face a penalty.

Open enrollment for the federal insurance marketplace for 2018 runs from Nov. 1, 2017, until Dec. 15. 2017.