Eliminating ACA's individual mandate would reduce deficit by $300B

Repealing an Affordable Care Act requirement that most Americans obtain minimum essential health insurance or pay a tax penalty would save an estimated $300 billion over the next decade, according to new federal estimates from the Congressional Budget Office (CBO).

The downside of eliminating the individual mandate, however, is that it would increase the number of Americans without coverage in 2025 by 14 million, resulting in 41 million uninsured by that year. What's more, over half of those uninsured, or an estimated 8 million, would come from those now obtaining coverage in the individual marketplace. 

The CBO report is a boost to congressional Republicans who hope to repeal the insurance mandate this fall through a budget tool known as reconciliation, reports The Hill. Under Congressional rules, any reconciliation package must be determined to reduce the deficit. The report says the deficit would be reduced by about $305 billion from 2015 to 2025.

The reductions in spending would result from savings of $110 billion for exchange subsidies and $200 billion for Medicaid and Children's Health Insurance Program spending, the report adds. The government would also lose about $6 billion in fines from people lacking insurance, resulting in a net difference of about $305 billion.

If the repeal succeeds, that may be bad news for some enrollees in the insurance program. The change would result in an increase in premiums in the individual market by 20 percent, the CBO estimates.

The individual mandate, which was upheld by the Supreme Court, has been one of the most controversial provisions of the ACA. Also in question is whether penalties may be too low to entice consumers to purchase coverage on health insurance exchanges, with one report saying monthly premiums for subsidized insurance cost more than those tax penalties.

To learn more:
find the CBO report (.pdf)
- read The Hill article