October 20, 2019
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Experts were right: Tax cuts and repeal of the individual mandate won’t help most Americans

Jon Elswick | AP
Jon Elswick | AP
HealthCare.gov, the website for the Affordable Care Act, is shown on Dec. 15, 2017.

Call them Republicans that tell the truth, if much too late. President Donald Trump’s former head of the Department of Health and Human Services said Tuesday that insurance prices will rise because the GOP weakened the Affordable Care Act. Earlier, Florida Sen. Marco Rubio said that few Americans were benefiting from Republican-backed federal tax cuts because large corporations were using their tax savings to raise stock prices.

It is refreshing to hear Tom Price and Rubio belatedly speak the truth. Of course, their comments come much too late to change or stop the damaging law changes that they are now criticizing. But they serve to underscore how the Republican tax cut package, which included a repeal of the Affordable Care Act’s individual mandate, was misrepresented to score a political win that doesn’t benefit the average American.

Speaking about the repeal of the mandate that required Americans to buy health insurance or pay a penalty, Price said: “There are many, and I’m one of them, who believes that that actually will harm the pool in the exchange market, because you’ll likely have individuals who are younger and healthier not participating in that market, and consequently that drives up the cost for other folks within that market.”

Price, who left the administration in September after it was revealed that he took expensive charter flights at taxpayer expense, made the comments at the World Health Care Conference in Washington on Tuesday. He said the opposite while working for the Trump administration and pushing for changes to the Affordable Care Act. To be sure, the mandate was far from perfect — penalties were disproportionately paid by working-class Americans — but it kept the pool large enough to be sustainable.

If this logic — that fewer people in the health insurance pool will mean higher costs for those that remain — sounds familiar, it is because health care and insurance experts, and the Congressional Budget Office, warned that this would happen.

In November, the budget office projected that 13 million fewer Americans would have health insurance by 2027 as a result of the elimination of the individual mandate. It also said average premiums in the exchanges would increase by about 10 percent in most years over the next decade, compared to leaving the mandate in place.

“Those effects would occur mainly because healthier people would be less likely to obtain insurance and because … the resulting increases in premiums would cause more people to not purchase insurance,” the budget office said at the time.

Sen. Susan Collins, who ultimately voted for the tax cut bill, added important amendments to the bill and tried to ameliorate the consequences of the mandate repeal. But her provisions have not been approved by Congress, as many feared would happen.

Already the number of people without health insurance is rising. The uninsured rate among working age adults has risen to 15.5 percent, from 12.7 percent in 2016, according to the Commonwealth Fund. It cites weakening of the Affordable Care Act for essentially scaring people away from the health insurance program.

Last week, Rubio spoke the truth about the Republican tax cuts passed last year. Like Price, however, he is no hero because he voted for the tax cut plan.

“There is still a lot of thinking on the right that if big corporations are happy, they’re going to take the money they’re saving and reinvest it in American workers,” Rubio said in an interview with The Economist. “In fact they bought back shares, a few gave out bonuses; there’s no evidence whatsoever that the money’s been massively poured back into the American worker.”

As if to bolster this point, Apple on Tuesday announced $100 billion in stock buybacks, a move to raise stock prices, which benefits the company’s executives and shareholders. Corporations are spending 58 times more on stock buybacks than they are spending on employee bonuses and wage increases, according to Americans for Tax Fairness.

Many experts said the tax cut package, and the repeal of the individual mandate that it included, would be bad for average Americans. It is discouraging that some Republicans are only speaking out after the damage has been done.

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