Implications of Senate Tax Plan’s Repeal of Individual Mandate on Florida: Almost 900,00 Fewer Insured Floridians, Higher Costs

If the proposed tax plan becomes law, approximately 900,000 Floridians will lose their health insurance and many will face higher premiums.

Background: The Senate’s Republican leadership is negotiating with members of the party’s rank-and-file to bring its version of the Tax Cuts and Jobs Act to a floor vote. The plan includes a provision to repeal the individual mandate in the Affordable Care Act (ACA). Earlier this month, the House passed a similar tax cut bill without repealing the  individual mandate. President Trump has indicated that he would sign the plan regardless of whether it repeals the ACA’s individual mandate or not.

Millions of Americans Nationwide and Hundreds of Thousands Of Floridians Will Lose Health Insurance: The CBO projects that 4 million Americans will lose health insurance in 2019 nationwide and that number rises to 13 million by 2025.  Of the 13 million, five million with low incomes will lose Medicaid coverage, five million will not sign up for coverage in the individual markets, and 3 million will lose employer-based insurance. In Florida, the Center for American Progress (CAP) estimates that by 2025, 873,000 people will lose health care coverage across the board.

More Expensive Marketplace Plans: Without a mandate to purchase insurance, some people will only purchase coverage when they deem that it is necessary (what economists call “adverse selection”) and the CBO estimates that this behavior will cause individual marketplace premiums to rise about ten percent.  For example, according to the Center for American Progress, an unsubsidized family of four in Florida with middle-aged parents and children under 14 will see their marketplace premiums increase by $1860 in 2019.

Finally, the CBO has estimated that bipartisan Alexander-Murray legislation will not reduce the magnitude of the consequences described above.

By Matt Childers