Who Wouldn’t Have Coverage If the Obamacare Mandate Is Repealed | The Heritage Foundation

…a recent review of the academic literature on the subject finds a mixed bag, but with the strongest link between coverage and health outcomes in cases where health insurance coverage improves access to care, “particularly among people with lower incomes and chronic conditions.”

That makes sense. Having health insurance makes less of a difference to people with higher incomes who can afford to pay for more of their medical care directly. 

That leads us to the crucial, practical question that this academic debate largely misses: Who are the people that would no longer have health insurance if the mandate penalty were repealed?

Notice what CBO is not saying. CBO is not saying that those Americans will “lose” coverage. Rather, CBO is saying is that—absent the mandate penalties—those Americans, will voluntarily forego enrolling in health coverage. CBO is explicit on this point…

That explains CBO’s somewhat counterintuitive projection that, without a mandate penalty, millions of poor people will turn down the offer of free Medicaid coverage. The reason is that they don’t think they need it (because they are healthy) and if they become ill and seek care at a hospital, they know the hospital will enroll them in Medicaid to get paid. Indeed, it is also why, long before Obamacare came along, that there was a persistent and notable gap between the number of people eligible for Medicaid and the number of people enrolled in the program.

It also explains CBO’s other counterintuitive projection: that eliminating the mandate penalty will generate higher tax revenues.  While not collecting mandate penalties brings in less revenue, CBO projects that there will be new revenues coming from the healthy people who decide to turn down tax-free employer health insurance in exchange for higher (taxable) cash wages. Presumably, CBO thinks that being healthy and very much alive are basic prerequisites for expecting those folks to generate additional tax revenues.

Repeal of the Obamacare mandate will not result in social catastrophe. Supporters of the mandate would have a more compelling argument if millions of poor and sick persons would be thrown out of their existing coverage, struggling with potentially fatal chronic illnesses and unable to get insurance to maintain continuous access to regular care. But that is not what CBO is projecting. Their argument is hardly compelling, to say the least, when the cohort of the future uninsured are healthy people who simply choose not to buy Obamacare coverage because they believe they don’t need it or want it.

http://www.heritage.org/health-care-reform/commentary/who-wouldnt-have-coverage-if-the-obamacare-mandate-repealed