The Affordable Care Act (ACA), also known as Obamacare, has been a subject of intense political debate and legislative action since its enactment. One significant piece of legislation that aimed to alter the ACA was H.R. 3762, the Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015. While this specific bill did not become law in its entirety, understanding what it proposed to repeal is crucial for grasping the ongoing discussions about healthcare reform in the United States. This article delves into the key provisions of H.R. 3762 and analyzes its potential impact based on estimates from the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT).
Key Parts of the ACA Targeted for Repeal in H.R. 3762
H.R. 3762 primarily focused on repealing specific financial and enforcement mechanisms within the ACA, while notably leaving other significant aspects of the law intact. The proposed changes can be categorized into two main phases:
-
Immediate Repeal upon Enactment:
- Individual Mandate Penalties: This provision of the ACA required most individuals to obtain health insurance or face a financial penalty. H.R. 3762 aimed to immediately eliminate these penalties.
- Employer Mandate Penalties: The ACA also mandated that large employers offer health insurance to their employees that met certain standards, with penalties for non-compliance. H.R. 3762 sought to repeal these employer mandate penalties as well.
-
Repeal After a Two-Year Delay:
- Medicaid Expansion: The ACA expanded Medicaid eligibility to cover more low-income adults. H.R. 3762 proposed to eliminate this expansion after a two-year period.
- Marketplace Subsidies: To make insurance purchased through the ACA marketplaces more affordable, the law provided subsidies. H.R. 3762 aimed to repeal these subsidies after the same two-year delay.
It is crucial to understand that H.R. 3762, importantly, did not propose to repeal the ACA’s market reforms. These reforms, which would have remained in place, include:
- Essential Health Benefits: Insurers are required to provide a specific set of essential health benefits.
- Guaranteed Issue and Community Rating: Insurers cannot deny coverage or vary premiums based on pre-existing health conditions or health status. They can only vary premiums based on age, tobacco use, and geographic location.
Estimated Effects of Repealing Mandates and Subsidies
The CBO and JCT analyzed the potential effects of H.R. 3762, focusing on health insurance coverage and premiums. Their estimates highlight significant consequences stemming from repealing the mandate penalties and subsidies while keeping the market reforms.
Initial Impact: Repealing Mandate Penalties
The immediate repeal of individual and employer mandate penalties was projected to have the following effects in the first new plan year after enactment:
-
Increase in Uninsured Individuals: The number of uninsured people was estimated to increase by 18 million. This increase was expected across different insurance markets:
- 10 million fewer people with non-group market coverage (individual policies).
- 5 million fewer people with Medicaid coverage.
- 3 million fewer people with employment-based coverage.
-
Premium Increases in the Non-Group Market: Premiums for individual policies were projected to rise by 20 percent to 25 percent compared to projections under the existing law. This increase was primarily attributed to:
- Reduced Enrollment: Repealing the individual mandate penalties would lead to fewer people, especially younger and healthier individuals, purchasing insurance.
- Adverse Selection: The insured pool would become riskier, with a higher proportion of older and less healthy individuals, driving up average healthcare costs.
-
Reduced Insurer Participation: Anticipating further market instability after the subsidies were also repealed, some insurers were expected to withdraw from the non-group market, leaving approximately 10 percent of the population in areas with no marketplace insurer.
Longer-Term Impact: Repealing Medicaid Expansion and Subsidies
The effects were projected to become more pronounced after the two-year delay when the Medicaid expansion and marketplace subsidies were also repealed:
-
Further Increase in Uninsured Individuals: The number of uninsured was estimated to rise to 27 million in the year following the elimination of Medicaid expansion and subsidies, and to 32 million by 2026. This represents a significant portion of the under-65 population becoming uninsured – estimated at 21 percent by 2026, compared to 28 million uninsured under the then-current law.
-
Dramatic Premium Increases: Premiums in the non-group market were projected to increase by approximately 50 percent in the first year after subsidy repeal and double by 2026. This dramatic rise was attributed to:
- Continued Enrollment Decline: Eliminating subsidies would make insurance unaffordable for many, leading to further drops in enrollment, especially among healthier individuals.
- Market Destabilization: The combination of adverse selection and reduced enrollment, coupled with the remaining market reforms, was projected to destabilize the non-group market significantly.
-
Massive Reduction in Insurer Participation: CBO and JCT estimated that roughly half of the nation’s population would live in areas with no insurer participating in the non-group market in the first year after subsidy repeal, increasing to three-quarters by 2026. This market contraction would severely limit access to individual health insurance for millions.
Comparison to Previous Estimates
The CBO and JCT’s analysis of H.R. 3762 evolved over time. The updated estimates presented here projected a larger increase in the uninsured population compared to earlier estimates. This was primarily because the newer analysis specifically accounted for the effects of leaving the ACA’s market reforms in place while repealing the mandate penalties and subsidies. The initial estimates did not fully incorporate this critical factor.
Conclusion: Understanding the Complexities of ACA Repeal
H.R. 3762 provides a crucial case study in understanding the complexities of healthcare reform and the potential consequences of selectively repealing parts of a comprehensive law like the ACA. The CBO and JCT’s analysis highlighted that repealing the mandate penalties and subsidies, while retaining market reforms, could lead to significant market disruption, dramatic premium increases, and a substantial rise in the number of uninsured Americans.
While H.R. 3762 was not fully enacted, the issues it raised and the potential impacts it illuminated remain relevant to ongoing healthcare policy debates. Understanding what part of the Affordable Care Act was proposed to be repealed and the projected effects helps to inform a more nuanced understanding of the challenges and trade-offs inherent in healthcare reform efforts.
