'Skinny repeal' of Obamacare would wreck the insurance market

'Repeal-only' health amendment fails in Senate
'Repeal-only' health amendment fails in Senate

The Senate effort to repeal Obamacare may have lost a lot of muscle.

With other plans looking destined to fail, Republicans are considering a "skinny repeal" of Obamacare in hopes of just keeping the repeal process alive. If they can pass that, lawmakers can hammer out a final proposal with the House in conference committee.

Though the Senate has yet to release details, the "skinny repeal" plan would likely eliminate the individual mandate, which requires nearly all Americans to obtain health insurance or pay a penalty, and the employer mandate, which obligates larger companies to provide affordable coverage to their full-time workers. The plan would also get rid of the Obamacare tax on medical device makers.

It's unlikely that this will be the final bill that Congress sends to President Trump for his signature. But Republicans are eager to eliminate the individual mandate, which is one of the least popular provisions in the Affordable Care Act. Their repeal-only amendment, which failed to pass on Wednesday afternoon, also called for spiking the mandate but would have given lawmakers two years to figure out a replacement plan.

Related: Health care debate: Senate rejects full Obamacare repeal without replacement

Obamacare's individual mandate, a concept that the conservative Heritage Foundation once supported, has met with mixed reviews. One of the health reform law's Achilles' heels has been that it did not get enough young people to sign up for coverage on the exchanges.

But as its possible repeal looms, insurers, health policy experts and consumer advocates are stressing how important the mandate -- or a similar stick to entice people to stay insured -- is to the stability of the individual insurance market. Its removal could cause serious harm.

"If there is no longer a requirement for everyone to purchase coverage, it is critical that any legislation include strong incentives for people to obtain health insurance and keep it year-round," the Blue Cross Blue Shield Association said in a statement Wednesday. "A system that allows people to purchase coverage only when they need it drives up costs for everyone."

Related: The Republican health care strategy: Pass bill first, fix it later

A provision like the individual mandate is critical because it brings young and healthy people into the market. Their premiums help offset the higher costs of those who need more medical care.

Without it, premiums would likely rise -- as would the amount the federal government has to shell out in subsidies to help people buy coverage, warns the American Academy of Actuaries, which helps insurers determine what rates to charge.

"A balanced risk pool requires enrollment of healthy individuals to keep premiums affordable and stable," Shari Westerfield, vice president of the academy's health practice council, wrote to Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer on Tuesday.

Repealing the mandate would leave 15 million fewer people with health insurance over a decade than under the current law, according to a Congressional Budget Office review last year. Premiums would increase about 20%, the agency found.

Related: Health care: Here's what the Senate is voting on

While those who receive federal subsidies would be protected from premium hikes, others who buy individual coverage would not, said Larry Levitt, senior vice president at the Kaiser Family Foundation.

Senators will continue their repeal effort on Thursday. They may also consider a version of their earlier bill to repeal and replace Obamacare, which would also repeal the individual mandate. Instead, it would institute a six-month waiting period for those who sign up for coverage after being uninsured.

The Senate parliamentarian, however, advised last week that the waiting period doesn't comply with the Senate rules for passing the bill with a simple majority. So lawmakers would likely have to come up with a different way to entice consumers to remain continuously insured.

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