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GOP Mulls Repealing Obamacare’s Individual Mandate in Tax Bill

by Countable | 11.7.17

What’s the story?

House Ways and Means Committee Chairman Kevin Brady (R-TX) said in an interview with Hugh Hewitt on Tuesday that he’s considering adding a repeal of Obamacare’s individual mandate to the GOP tax reform package that will be moving through his committee this week.

Repealing the individual mandate would save the federal government $338 billion over the next decade through reduced health insurance subsidies. This makes it an attractive "pay-for" to include in the tax reform package, as it would offset the impact of proposed tax cuts on the federal deficit absent other spending cuts.

Why does it matter?

Obamacare’s individual mandate requires people to buy health insurance at the expense of a tax penalty (formally known as the "individual shared responsibility payment"). It was created to encourage participation in health insurance marketplaces by people who otherwise would choose not to not buy health insurance.

What the individual mandate’s penalty amounts to can vary because a person pays either a flat rate of $695 per adult and $347.50 per child or 2.5 percent of their household income, whichever is greater. Some exemptions to it exist for hardships related to life events or financial status and membership in some groups.

Critics of the individual mandate argue that the federal government imposing a mandate on individuals to buy a product or pay a penalty violates their personal liberty. That led the late Supreme Court Justice Antonin Scalia to wonder during oral arguments in an Obamacare case if the government could impose a broccoli mandate on food consumers.

Others have noted that the penalty is primarily paid by low-income households. Using IRS data from 2015, the Washington Free Beacon reported that of the 6.7 million households that paid the individual mandate penalty, 79 percent earned less than $50,000 per year, and only eight percent earned more than $75,000 a year. In analyzing recent GOP healthcare proposals, the Congressional Budget Office estimated that 14 million fewer people would go without health insurance if the individual mandate were repealed.

Proponents of the individual mandate argue that without it, health insurance markets would collapse because more young and healthy people who consume less healthcare would forego purchasing coverage altogether. That causes insurers to hike premiums for those who remain in the market — older people who visit the doctor more — so that they’re not paying out more in benefits than they receive in premiums. (The economic term for this phenomenon is "adverse selection.")

What do you think?

Should Obamacare’s individual mandate to buy health insurance or pay a tax penalty be repealed? Does the mandate infringe on personal choices? Is it necessary to ensure more people buy health insurance? Hit Take Action, tell your reps whether you’d like to see the individual mandate repealed and share your thoughts in the comments below!

— Eric Revell

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(Photo Credit: Sherry Smith / iStock)

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(253)
  • Jean
    11/07/2017
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    Do NOT repeal the ACA individual mandate!!! Quit screwing with our healthcare.

    Like (97)
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  • Carolyn
    11/07/2017
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    Why would you want to repeal the individual mandate??? Do you really think it is fair to make the rest of us pay when people without insurance rely on the ER, which is much more costly than going to a GP, and then they don’t pay for the trip and have no insurance to cover it? Preventative care is much cheaper than emergency care. Insurance makes sure more people use preventative care rather than emergency care.

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  • RadicalModerate
    11/07/2017
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    Mandate is wrong but so is everything about health insurance. We want UNIVERSAL FREE HEALTHCARE. not insurance.

    Like (78)
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  • William
    11/07/2017
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    The republicans are totally shameless!!! They will stop at nothing to harm our working people for the benefit it the wealthiest 1% of Americans!!!!!!!

    Like (60)
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  • C
    11/07/2017
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    How about if we get rid of congressional health insurance. That will save us some money.

    Like (51)
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  • I.Got.an.Idea...
    11/07/2017
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    Chip, chip, chip away Repubs, and we will chip away at your seats in Congress. This may be an example of where ‘Perseverance’ may not be to your advantage. Stop looking at that motivational picture on your wall and asking yourself, should I or shouldn’t I.....

    Like (51)
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  • Courtney
    11/07/2017
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    Unless you’re prepared to replace the ACA (Obamacare) with universal health care for everyone, leave it alone.

    Like (42)
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  • Addie
    11/07/2017
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    Stop trying to dismantle the ACA.

    Like (37)
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  • William
    11/07/2017
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    ..... oh, by the way- trump - impeachment or Amendment 25, Section 4, NOW!!!!!!!

    Like (24)
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  • Chips
    11/07/2017
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    Insurance only works when all, healthy and sick are in a pool, only this can make it affordable

    Like (22)
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  • Karan
    11/07/2017
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    There’s no reason to force me to buy expensive healthcare in which most of the essential benefits, I’m never even gonna use. I’d rather invest it in a college fund for my kids. No one should force me to buy it.

    Like (22)
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  • Christopher
    11/07/2017
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    Unless you plan on passing Medicare for All, then I am against repealing the mandate.

    Like (18)
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  • Larry
    11/07/2017
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    It’s time to let this ship sink. The mandates are wrong. People need to go back to how it was - pay for your own damn level of insurance. It’s time to put those with their hands out back to work and pulling their own weight.

    Like (18)
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  • Ronda
    11/07/2017
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    Since you have proven that you’re intellectually incapable of improving the ACA, stop trying to destroy it. We need universal coverage, single payer Medicare for All. If you can’t do that, then do nothing until you’re sent home. BTW, I had a chance to look at the tax “reform” you’re proposing - it’s horrendous. Why don’t you call it the Anti-Robin Hood Bill? Steal from the poor to give to the rich. I will pay more, so that Donald Trump can pay less. No. Just, no.

    Like (15)
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  • Lee
    11/07/2017
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    Sure try it. I can’t wait til you are up for re-election. The republicans will be responsible for all the health care issues. Whee! Don’t let the door hit you in the a@@

    Like (14)
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  • Curt
    11/07/2017
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    No one like being told what to do. However, The mandate is what makes the ACA workable for the insurance companies. If the individual mandate is removed it will bankrupt the insurance industry.

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  • DaveSnyder
    11/07/2017
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    Repeal the mandate. And repeal the rest of it as well. Return our healthcare to us and our doctors!!! You know, like you promised in order to get our votes.

    Like (11)
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  • Patty
    11/07/2017
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    Please keep the individual mandate. You have done quite enough to destabilize the markets.

    Like (9)
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  • Wayne
    11/07/2017
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    Obama screwed with our healthcare. PLEASE, For the love of God REPEAL the individual mandate. It is unAmerican

    Like (9)
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  • Jay
    11/07/2017
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    No. Leave Obamacare alone unless you can make it better

    Like (8)
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