- Following passage of the Republican tax cut bill
late this week in the U.S. House, the U.S. Senate
now takes up its version.
For his part, Wisconsin Republican Senator Ron Johnson
said he cannot support the measure saying,
"We have an opportunity to enact paradigm-shifting tax reform
that makes American businesses globally competitive.
In doing so, it is important to maintain the domestic
competitive position and balance between large publicly-traded C
corporations and pass-through entities.
These businesses truly are the engines of innovation
and job creation throughout our economy
and they should not be left behind.
Unfortunately, neither the House nor Senate bill
provide fair treatment.
So I do not support either in their current versions."
Now, Senate leaders can afford only two Republican defections
to win passage.
The Senate bill, which is expected to go to a vote as soon
as the week after Thanksgiving also includes a repeal of the
Affordable Care Act's individual mandate,
something the House bill does not include.
The individual mandate requires people carry health insurance
and exacts a penalty for people who do not.
That penalty is $695 for an adult.
What happens if this mandate goes away?
We asked the health policy director at the UW Population
Health Institute, Donna Friedsam.
And thanks very much for being here.
- Happy to be here.
- So to that question, what does happen if this individual
mandate is eliminated?
- The people that are looking to eliminate the mandate
consider it a tax on people who are being required to purchase a
product they may not want to purchase.
And suggest that people are having to pay for something they
don't want and perhaps something that is not up to what they're
interested in buying.
But if the mandate goes away, there's a number of unintended
consequences we may see happen.
Number one, the people who are healthy and younger who won't --
will no longer be compelled to purchase insurance,
will likely not purchase insurance.
And when that happens, the people that remain in the market
will be the older people or people who have more health
needs and that means the insurance premiums will increase
for those people.
And overall insurance premiums are expected to increase 10%.
That's according to the GAO or more likely
more other people suggest.
- Now, I've read that this individual mandate
was not as effective as planned.
How true is that?
- The individual mandate is considered to be a very
important part of the Affordable Care Act in terms of bringing
people to purchase their insurance coverage and has been
important in getting people to consider
their insurance options.
Now, many people have indeed looked at the penalty and
considered whether the penalty is something they want to take
instead of purchasing insurance,
particularly younger, healthier people.
And there have been a number of exceptions in the-- to the
mandate that allow people to opt out of purchasing insurance.
But overall the carriers in the market consider the individual
mandate to be one of the key components to allowing them to
offer coverage in the Affordable Care Act.
- What's the interplay between the individual mandate and
pre-existing conditions?
- So the Affordable Care Act or otherwise known as Obamacare
requires insurance companies to provide insurance to all people
regardless of their pre-existing conditions or their health
status.
So the only way they can do that at an affordable price is to
make sure that they have enough healthy people also enrolling in
coverage so that everyone shares the risk and thus the costs are
shared across a broad risk pool or broad population of enrolled
people.
If people who are young and healthy think they don't need to
participate in insurance, the only people that will enroll in
insurance are people who currently have health needs or
have high health risks.
And then the insurance companies will price their products to
reflect that high need, and the premiums will become very
expensive and in all likelihood unaffordable for many people.
- Now, you addressed this a little bit earlier,
but I've read that the projection is that 13 million
people would end up not being covered if this mandate goes
away.
And I just wonder whether this number represents people who
never wanted coverage in the first place or is it because
without the mandate, coverage just becomes too expensive?
- The Republicans who are advocating for this change in
the tax bill are suggesting that the 13 million people might be
people who are simply opting out of insurance and not buying a
product that they don't want.
It seems that some people will indeed be opting out for those
reasons, but many people will be not purchasing coverage because
they're going to find it unaffordable,
further unaffordable.
Not to say people aren't finding it unaffordable today.
That's another challenge we have to address.
But people will find it more unaffordable as the premiums
increase with this change.
And as well without the mandate, people will no longer be
compelled to even look for coverage.
And currently many of the people that go look for coverage go not
knowing what kinds of federal subsidies are available.
And the savings that are contemplated in the tax bill are
there because they're expecting that all the people that are
currently getting federal subsidies will no longer be
taking those subsidies because they won't be going to look for
their coverage and claiming the federal subsidies that are
available.
- Now, my understanding is about 243,
000 people in Wisconsin are on Obamacare plans right now.
How might this repeal or elimination of the individual
mandate affect Wisconsin?
- So we're currently in an open enrollment period
right now in Obamacare.
So it started on November 1.
And it goes through December 15.
And those are for plans that start on January 1.
And people should know no matter what's happening in Congress
right now open enrollment for 2018 is in existence and they
need to go and look for coverage.
But indeed if the individual mandate goes away,
then the premiums going forward will increase and in all
likelihood, people will find it more difficult to afford
coverage, particularly people who don't have access to the
federal premiums that are available.
That being said, the majority of people who look for coverage
through the Affordable Care Act do have access to federal
premium subsidies.
The concern here again is without the mandate,
people will not go look for coverage and will never find out
about the subsidies that are available for them.
- At what point does all this chipping away at the Affordable
Care Act law just mean the whole thing collapses?
- Ultimately the more deterrent there is for people to look for
coverage and find out what's available for them.
And particularly the more deterrents there are for
healthier people to go enroll in coverage,
the less of a business incentive there is for insurance companies
to participate in the program and to offer products.
And that's when the insurance carriers say,
"We can't offer a product that is going to work for our company
and make it financially viable." And that's when it does become a
question of whether the program can continue.
What we need is a stable insurance market where people do
have incentives to enroll and make it a financially viable
system so that insurance carriers see a business model
there that they can continue to offer products.
- All right.
Donna Friedsam, thanks very much.
- Thank you.