After multiple failures to repeal the Affordable Care Act, the Republican-controlled Congress and President Donald Trump have succeeded in passing a tax bill that nixes one of ACA’s key tenets: the individual mandate.
But they have not, as the president claims, repealed the healthcare law itself.
“We have essentially repealed Obamacare, and will come up with something that will be much better, whether it’s block grants or whether it’s taking what we have and doing something terrific,” Trump said during a Cabinet meeting on Wednesday.
The individual mandate—which assesses a tax penalty on those who fail to maintain health coverage—is certainly a major part of the ACA. In fact, the mandate makes two of the law’s other major insurance market reforms possible: banning insurers from denying coverage to those with pre-existing conditions and preventing them from charging higher premiums based on health status.
The thinking goes that because those reforms open up the individual market risk pool to those who are less healthy—and costly—the mandate is needed to incentivize healthy people to purchase coverage, thus preventing insurers from having to hike premiums.
However, experts have never really agreed on how effective the mandate is at doing that, or what the consequences of repealing it will be. Case in point: While the Congressional Budget Office has estimated that repealing the mandate would cause an additional 13 million to be uninsured over a decade, a Standard & Poor’s analyst contended that the move would add just 3 million to 5 million to the uninsured rolls.
His argument? The individual mandate is “weak” and not the primary force driving people to buy coverage. Rather, they do so because of the generous government subsidies and because they need it.
In fact, further debunking the idea that the ACA has been repealed, those subsidies have not disappeared with passage of the GOP tax bill. While Trump has defunded one type of subsidy—cost-sharing reduction payments—insurers are still obligated to make those payments to consumers. Plus, Congress might still appropriate short-term funding for CSRs in legislation it’s planning to consider next year.
Other key parts of the law also remain intact, including the aforementioned protections for people with pre-existing conditions, the ACA’s signature insurance marketplaces, and the rules governing the minimal amount of benefits that plans have to provide.
Trump and GOP lawmakers have previously said they want to return to the prospect of repealing the ACA in 2018. But because Alabama elected Democrat Doug Jones as its next senator, the Senate will have an even slimmer majority—making it less likely Republicans can pass such a bill without Democratic support.