Axing Obamacare Individual Mandate Would Save $338 Billion

(CNN Money) — Repealing Obamacare’s individual mandate would give GOP lawmakers an additional $338 billion over 10 years to help pay for their proposed tax cuts.

The Congressional Budget Office updated its estimate Wednesday in response to lawmakers’ interest. Republicans are considering axing the unpopular provision — which requires nearly all Americans to have coverage or pay a penalty — though it’s not included in the current House tax reform bill.

A CBO score published in December found nixing the mandate would save $416 billion over a decade. While the federal government would lose some revenue from the penalty’s elimination, it would make up that and more because fewer people would have federally subsidized policies, the CBO says. The agency did not specify why the figure changed in its blog post announcing the deficit reduction number.

While Republicans are eager for the additional savings, they are not as excited about the potential impact on insurance coverage and premiums. The CBO will release a full estimate Wednesday afternoon, but last year it projected that 15 million fewer Americans would be covered by 2026 if the mandate were repealed and rates would rise by 20%, as compared with the current law.

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GOP leaders and most members have been cautious about including the repeal in their tax efforts out of fear that the politics of Obamacare repeal would further complicate the overhaul. But some are still pushing for it.

“We haven’t been given a rational reason for why not,” said Rep. Dave Brat, a Republican from Virginia who would like to see the Senate include a repeal of the mandate in its bill.

The money generated by repealing the individual mandate is a major reason why Republicans haven’t entirely ruled it out. Republicans have long argued they could go even further to cut taxes for individuals, but the Senate instructions for the bill outline that the GOP cannot increase the deficit by any more than $1.5 trillion over the next decade. And tax writers in the House are already having a hard time trying to stick to that yardstick with the rate cuts they have already proposed.

Related: Top White House aides to sell Senate Democrats on tax reform

Repealing the individual mandate, meanwhile, could make it harder to get Democratic votes for the tax bill. A handful of Senate Democrats huddled with chief economic adviser Gary Cohn and White House legislative affairs director Marc Short Tuesday afternoon at the Library of Congress. The meeting, which President Trump called into from Asia, was an attempt to get Democratic support for the Senate tax bill before it is rolls out later this week.