What Does The New GOP Tax Bill Mean For Obamacare? Here’s What You Need To Know

If you thought you had a lot of reading to get through during finals week, Congressional leaders may have had you beat. The proposed GOP Tax Bill that Congress began voting on this week, consists of 429 pages in the House Bill and 479 pages in the Senate Bill and outlined far more than just a new system of tax brackets. Everything from plans to tax graduate students tuition wavers as income to reducing the corporate income tax, the most highly-debated and concerning proposal in the 908 page bill, is what many refer to as the “destabilizing” of Obamacare. 

Obamacare, also known as the Patient Protection and Affordable Care Act was signed into law in March of 2010 by President Barack Obama. The plan required all Americans to purchase health insurance, or pay a penalty if they wanted to opt out. The plan, while not bulletproof, did put access to healthcare in reach for millions of Americans. The LA Times reports, “In California alone, the percentage of uninsured working-age adults has plunged to 10% from 24%. Nationwide, the uninsured rate fell to a record low 8.8% last year.” 

So what does the new GOP tax bill mean for Obamacare?

In short, the bill repealed the individual mandate requirements of the Affordable Care Act. Meaning that, if you opted to pay a penalty to excuse yourself from buying health insurance under Obamacare, you no longer have to pay a penalty and can simply be uninsured. However, this means that the rate for those who do choose to purchase health insurance will increase.

What’s tricky about this is the cost of health insurance will depend on how many people enroll, thus making it virtually impossible to know the exact cost in which health insurance will be.

 “If only sick people enroll, the market falls apart. Imagine what would happen to homeowners’ insurance if only people in the canyons bought policies,” Dana Goldman, director of USC’s Schaeffer Center for Health Policy and Economics told The LA Times. “The mandate is designed to make sure the market doesn’t fall part.”

While young adults see themselves as virtually indestructible and no one plans to get in a car accident or fall ill, having health insurance still makes sure that you are protected if those occur. By destabilizing Obamacare and not enacting an individual mandate that requires everyone to pay some form of health insurance, premiums will increase.

“Allowing people to wait until they become sick before they buy insurance just makes the market unsustainable,” Michael French, a health economist at the University of Miami said. “It means the only people covered are sick people, and that make insurance too expensive.” 

However, Republicans and strong proponents of the new tax bill have argued that, with the destabilizing of Obamacare, tax cuts will increase because of the savings the government will receive in not spending money on Obamacare subsidies. And if you’ve read anything about the GOP’s tax cut plans, you would know those cuts are for the wealthy. Which ultimately has added more fuel to the critic’s fire. 

The Congressional Budget Office has estimated that by 2027, 13 million people will be without health insurance simply because they do not want it, or because they cannot afford it. Politico reports that immediately following President Donald Trump taking office in January of 2017, there was not the usual surge in enrollment. And while the final numbers for 2018’s open enrollment have not been released “all signs point to a drop-off.”  

The fate of Obamacare is virtually unknown at this point, but many experts are saying it will take a Christmas miracle for this bill to not be passed through as it heads to President Trump’s desk— and if it is, millions of Americans will be unable to afford access to healthcare.