GOP lawmakers have a bold new addition to their tax reform bill – a repeal of the individual mandate in Obamacare.
Their plan: Save an estimated $338 billion over the next decade by not forcing people to purchase healthcare with government subsidies.
Their incentive: If fewer Americans are mandated to buy health insurance, fewer will sign up for Medicaid or private insurance that the federal government helps to pay for.
Sen. John Cornyn, R-Texas, says waiving the mandate will save low-income Americans who make less than $25,000 and pay a penalty for not buying healthcare.
“Rather than buy the insurance that supposedly we want them to buy, we overprice it and then we penalize them when they can’t afford it,” Cornyn said.
If the federal government is able to save $338 billion, it will help solve the fundamental problem of tax cuts – a loss in government revenue after cutting corporate and individual rates.
Republicans also argue that Americans will save by avoiding the Obamacare fine forced on those who don’t pay for healthcare.
“That’ll be a huge influx of money into their pocket that right now they’re having to pay the federal government,” said Cornyn.
But Democrats say ending the individual mandate is a bad idea. They argue it will cause healthcare premiums to spike and point to a government estimate that 13 million Americans will drop their health insurance in the next 10 years.
The president is just back from his trip to Asia and has tweeted his support for the repeal, calling the individual mandate “unfair and highly unpopular.”
The House is set to vote on its own tax bill Thursday and the Senate could vote next week.
If the GOP does indeed pass tax reform and repeal a serious piece of Obamacare, Republicans hope it will show that Washington can get something done. Such legislation could both strengthen the economy and pave the way for the GOP in next year’s mid-term elections.