The report assumes that reconciliation legislation would repeal the individual mandate penalties and then, after a delay of two years, the premium tax credits and Medicaid expansions. The CBO further assumes that the legislation would leave intact the ACA’s insurance reforms, which presumably cannot be amended through reconciliation under the Senate’s reconciliation rules. These include the ACA’s essential health benefit and actuarial value requirements; its limitations on health status underwriting and pre-existing condition exclusions; and its rating requirements that allow premiums to vary only based on age, geographic locations, and tobacco use.
The CBO projects that the repeal legislation would not have an immediate dramatic effect in 2017 because premium increases would already be established and enrollment set for 2017. In 2018, however, 18 million people would become uninsured, including 10 million fewer enrollees in the nongroup (or individual) insurance market, 5 million fewer with Medicaid coverage, and 3 million fewer with employment coverage. These increases would be due to a combination of people dropping coverage because it was no longer mandated and to insurers abandoning the nongroup market and increasing premiums because of adverse selection concerns. As of 2018, insurers would increase premiums by 20 to 25 percent and about 10 percent of the population in areas where no insurers were available in the nongroup market.
In the year following the repeal of the Medicaid expansions and premium tax credits, the number of people without health insurance would grow to 27 million, further increasing to 32 million by 2026. If Congress repealed the insurance reforms as well, the number of uninsured people would only grow to 21 million in the year following repeal and to 23 million by 2026 (although coverage would be less comprehensive and individuals with pre-existing conditions may be unable to find coverage). The increase in the uninsured of 32 million would be the net result of 23 million fewer nongroup market enrollees, 19 million fewer covered by Medicaid, and 11 million more enrolled in employer coverage. In total, 59 million would be uninsured; 21 percent of the population.
CBO projects that the repeal of the individual mandate, premium tax credits, and Medicaid expansions would destabilize the nongroup market and that the destabilizing effects would worsen over time. In the first year after the repeal of the marketplace subsidies took place, nongroup market premiums would increase by 50 percent relative to current law projections and about half of the population would live in states with no insurer participation in the nongroup market. By 2026, nongroup market premiums would double and three-quarters of the population would live in states with no insurers in the nongroup market. Fewer than 2 million people would have nongroup market coverage.