GOP tax plan will cause health insurance rates to spike
If the Republicans manage to pass their tax plan as is expected this week, coverage may get much pricier.
If Republicans successfully pass the GOP tax plan this week – and the expectation is that it will – health insurance could become much more expensive for Americans, say opponents.
The final version of the Republican plan will repeal the individual insurance mandate of the ACA.
The Affordable Care Act (ACA) requires Americans who don’t have health insurance coverage through their employers, other groups, Medicare or Medicaid, to purchase coverage for themselves. This requirement, often known as the individual mandate, encourages those Americans to purchase their health plans at the state or federal insurance exchanges through which subsidies are available. Failing to comply with the individual mandate results in tax penalties in order to incentivize purchasing coverage.
If the GOP tax plan moves ahead and repeals the individual mandate, many young and healthy people will lose their incentive to purchase a health plan. Without the participation of healthy individuals – whose premiums help to cover the cost of covering less healthy people – insurance companies will be forced to raise premiums in order to compensate.
Aside from causing premiums to rise the GOP tax plan could also cause insurers to withdraw from exchanges.
Insurance companies may find that it is no longer worth their while to leave regional markets. The Congressional Budget Office, which is nonpartisan, predicted that the price of health insurance is likely to increase by about 10 percent. This will reduce the number of Americans with affordable health care by 13 million people over the next ten years.
“With Republicans adding the destruction of the Affordable Care Act to their bill in the Senate, the fight to defeat the GOP tax scam is now a life or death struggle for millions of American families,” said Nancy Pelosi, the House Minority Leader. “Republicans will raise taxes on tens of millions of middle class families (and) explode the ranks of the uninsured by 13 million and spike premiums for Americans with preexisting conditions.”
The GOP tax plan represents the latest Republican effort to repeal and replace the Affordable Care Act. The party has made multiple attempts to get rid of Obamacare, only to fail on every account.