Study finds less coverage loss from repealing ObamaCare mandate

A new report from Standard & Poor’s predicts less savings and coverage loss from repealing ObamaCare’s individual mandate compared to the most commonly-used estimate.

The study from S&P finds that repealing the mandate, as Senate Republicans are proposing in their tax-reform bill, would result in three to five million more uninsured people and $60 billion to $80 billion in savings over 10 years. That estimate is far less than the more commonly-used Congressional Budget Office (CBO) estimates, which predict 13 million more uninsured people and $338 billion in savings over the same period.

The S&P analysis suggests that both opponents and supporters of repealing the mandate could be overestimating how much effect the move would actually have. According to this analysis, repealing the mandate would result in far fewer uninsured people, but also far less savings.

{mosads}The key difference between the two analyses is that S&P estimates that the mandate is not the major driver for people signing up. Instead, its analysis puts more weight on the importance of the financial assistance through the health law’s subsidies.

“Our estimates are lower because we believe that it is not the mandate penalty, but the intrinsic financial incentives available to most eligible enrollees that drive enrollment,” said Deep Banerjee, an analyst at S&P.

Insurers still warn, though, that repealing the mandate would destabilize markets by removing an incentive for healthy people to enroll.

The CBO, for its part, has said that it is in the process of revising its estimates to find less effect from repealing the mandate, but its more drastic estimates remain in place for purposes of the tax bill.