The Hill’s Julian Pecquet reports that in light of Judge Henry Hudson’s ruling to invalidate the individual mandate in the Affordable Care Act, Sen. Tom Coburn (R-OK) is passing around an old Congressional Budget Office (CBO) report touting the deficit savings of eliminating the requirement. The report estimates that the change could “bring in $202 billion from its 2014 start date to 2019,” while causing “the number of uninsured people to increase by 16 million — to 39 million — over the same time period”:
The penalty itself — $695, or 2.5 percent of income, whichever is greater, starting in 2016 — would bring in about $17 billion from 2010-2019, CBO’s scoring window. But that would be more than offset by savings from the millions of people who would choose not to take advantage of federal health programs and subsidies.
According to the CBO, repealing the mandate would reduce the number of people on Medicaid and the Children’s Health Insurance Program by 6 million to 7 million people; reduce those with individual coverage by 5 million; and reduce those who choose employer-sponsored coverage by 4 million to 5 million people.
The savings to Medicaid would amount to about $113 billion, according to CBO, while the government would save another $39 billion in uncollected subsidies and about $60 billion in increased tax revenues linked to the reduction in employer coverage.
First, it’s refreshing to see the Republicans citing the CBO again, an agency they had previously maligned as a group of hardworking geeks who simply do what they’re told and thus produce analysis that is grounded on flawed assumptions that can’t be trusted. Secondly, it’s telling that Coburn is simply dismissing the increase in the uninsured and ignoring the fact that if you eliminate the mandate and remove any incentive for young people to purchase coverage, you’re dramatically increasing the costs for those individuals who need insurance. From the CBO’s analysis:
This adverse selection would increase premiums for new non-group policies (purchased either in the exchanges or directly from insurers in the non-group market) by an estimated 15 to 20 percent relative to current law. Without the mandate, Medicaid enrollees would also have higher expected health spending, on average, than those enrolled under current law.
Coburn’s suggestion that we should lower the deficit by asking the poorest Americans to pay more for health insurance coverage is troubling, no? I would just point out that 18% of Oklahomans live in poverty and 20% rely on Medicaid for coverage. But, at least they’ll be doing their part to pay off the national debt.