With tax bill passage, Senate is finally able to take a chunk out of the ACA

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If Congress is successful in sending a bill to the president's desk that repeals the individual mandate, there could be serious consequences for the individual insurance market.

After failing multiple times to repeal major parts of the Affordable Care Act, Republicans have succeeded in passing a bill through the Senate that rolls back one of the law’s most important tenets: the individual mandate.

That bill—which is chiefly an overhaul of the tax code—will likely change after the House and Senate hold a conference committee to reconcile the differences in the separate measures they’ve passed. However, based on conservatives’ dismal view of the individual mandate, the provision repealing it stands a good chance of making it into the final version of the GOP’s tax bill.

RELATED: CBO says Alexander-Murray bill wouldn't soften the blow of individual mandate repeal

Indeed, while the House’s version of tax reform did not include an individual mandate repeal, it certainly should, argued an op-ed by David Hogberg, an adjunct fellow at the conservative think tank called the National Center for Public Policy Research. The mandate is effective, he said, and “was never anything more than a gross encroachment on liberty.”

House Ways and Means Committee Chairman Kevin Brady, R-Texas, appears happy to take that advice.

“The House has repeatedly repealed the individual mandate, because it is a tax to force Americans to buy healthcare whether they want or can use it,” Brady said at an event held last Tuesday by the right-leaning American Enterprise Institute. While Brady noted that the conference process has to run its course, he added that tax penalty for not buying insurance often hits middle-income individuals the hardest when they can’t afford to buy coverage.

President Donald Trump has also been supportive of repealing the mandate in the GOP’s tax bill. If he gets his wish, though, there could be grave consequences for insurance markets—particularly the ACA exchanges. While unpopular, the mandate supports the ACA’s other provisions that protect people with pre-existing conditions from being denied coverage or hit with large premium surcharges.

Without the mandate—and lacking an alternative means to drive enrollment among healthy individuals—the American Academy of Actuaries predicted that individual market risk pool will likely deteriorate, leading to rising premiums and mounting losses for insurers.

For its part, the Congressional Budget Office has estimated that repealing the mandate would increase the number of uninsured by 13 million over a decade and increase premiums by 10% during most years in that period. The ratings agency Standard & Poor’s, however, estimated the effects would be more muted, reasoning that government subsidies—not the tax penalty—is the main force compelling consumers to stay covered.

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