Questions about the potential impact of the new Republican tax bill are flying, but one of the biggest changes under the bill President Donald Trump signed Friday concerns health care, not taxes.
Starting in 2018, the legislation ends the Affordable Care Act requirement that everyone buy health insurance or pay a penalty – something U.S. Sen. Lamar Alexander, R-Tenn., called “a particularly cruel tax to lower-income Tennesseans.”
While unpopular, the individual mandate was originally written into the Affordable Care Act because – like all insurance – it needs healthy people enrolled to offset the cost of sick people. Experts believe that without this requirement, healthy people will drop their insurance, causing costs to rise and forcing more people out of the insurance pool.
The nonpartisan Congressional Budget Office estimates 13 million people will lose coverage by 2027, but also estimates a $338 billion benefit to the federal deficit because fewer people will be receiving Obamacare tax subsidies.
Republicans are celebrating the potential savings, which they need to pay for tax cuts expected to add $1.7 trillion to the deficit, according to the CBO. They say ending the mandate is a victory for those struggling to make ends meet, although many low-income individuals qualify either for an exemption or for subsidies that reduce insurance premiums.