CBO Revises Deficit Estimate From Obamacare Individual Mandate Repeal

By Reuters Staff

November 09, 2017

WASHINGTON (Reuters) - The Congressional Budget Office on Wednesday said that repealing the individual mandate for health insurance would reduce the federal budget deficit less than first forecast as it readied a revised analysis of a policy shift favored by Republicans.

The CBO, the nonpartisan budget-scoring agency, said in a statement on its website that eliminating the mandate in the Affordable Care Act, also often dubbed Obamacare, would lower the deficit by $338 billion over the next decade, not $416 billion, its previous estimate.

It will release a fuller revised analysis conducted with the congressional Joint Committee on Taxation later on Wednesday that will also estimate the impact on health insurance coverage and premiums.

"The agencies are in the process of revising their methods to estimate the repeal of the individual mandate," the CBO said, adding that work on updating the methodology was not yet complete.

The individual mandate is a central tenet of Obamacare and requires most people to purchase health insurance or else pay a fine. Americans must note on their tax returns whether they have health coverage.

Health policy experts and proponents of Obamacare say the mandate is essential to making the law work, as it incentivizes young and healthy people to join health insurance markets and help offset the costs of sicker patients.

Yet it has proved to be among the most controversial portions of the law as Republicans, who say Obamacare is too expensive and an example of government overreach, argue that the federal government should not be able to require people to buy health insurance if they do not want it.

The CBO in an earlier report said the individual mandate increases the federal deficit by encouraging people to buy subsidized coverage, either through Medicaid, the government health insurance program for the poor and disabled, employer-provided plans or through the Obamacare individual health insurance market.

It said that eliminating the mandate would lower the deficit by reducing federal spending on subsidized health insurance coverage.

Some Republicans want to include a repeal of the mandate in legislation to reform the tax code. The U.S. House of Representatives unveiled its tax plan last week, and the Senate's plan is expected to be released on Thursday.