Tax Plan May Axe Individual Mandate

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Tax Plan May Axe Individual Mandate

 

If Senate Republicans get their way, Americans may not only see their taxes cut, but they may also be free from the federal mandate to buy health insurance. Depending on your views about the Affordable Care Act, or Obamacare, this is either a win-win situation or a sneaky move to end health care for millions of Americans.

 

Republicans on the Senate Finance Committee have been busy writing their version of a tax bill for consideration by the full Senate. Among traditional tax reforms such as cutting rates, they also included a provision to end the Obamacare mandate that punishes taxpayers who do not have health insurance.

 

This “individual mandate” is designed as a tax administered by the Internal Revenue Service. In a 2012 case, the Supreme Court upheld this provision of the law on the grounds that it was not a true mandate to purchase a product, but a tax on those who did not purchase it.

 

Ending the individual mandate will not only kill a vital part of Obamacare, a key Republican legislative priority, it will also ease the path for deeper tax cuts. Due to budget rules, this tax legislation can only add $1.5 trillion to the deficit over the next ten years. An individual mandate repeal would produce an estimated $338 billion in new federal revenue over the next decade. That new revenue could be offset with more tax cuts.

 

The Congressional Budget Office estimates that this new revenue will be available because fewer people will purchase health insurance, thus saving the federal government money that it would otherwise spend on subsidies. This has Democrats upset. Senator Al Franken (D-MN) tweeted, “Senate GOP just added provision to their tax plan that would gut ACA & kick 13M ppl off insurance. Yes, it's same tax plan that would add $1 trillion+ to deficit while giving majority of benefits to corporations & the rich.”

 

Tax reform must pass both chambers of Congress and be signed into law by the president. The tax reform bill proposed by Republicans in the House of Representatives does not include a repeal of the individual mandate. President Trump has expressed support for including the repeal as part of the tax package.

 

Do you think that the tax reform bill should also repeal the individual health insurance mandate? Or are Republicans hurting Americans’ health care with the mandate’s repeal?

 

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