The Urban Institute has published this analysis of the implications of a partial repeal of the Affordable Care Act (ACA) if Congress defunds key sections of the legislation through a budget reconciliation bill similar to the one passed by Congress but vetoed by President Barack Obama in January 2016. Such a “repeal and delay replacement” approach would defund the health insurance marketplaces, the employer mandate to offer employees health insurance, the individual mandate to buy health insurance, premium and cost-sharing tax credits for low-income Americans, the expansion of Medicaid to more low-income adults, and several taxes, including taxes on medical devices and the so-called Cadillac high cost health plans. If Congress proceeds with this approach, the following impacts would result:
- The number of uninsured people would rise from 28.9 million to 58.7 million in 2019, an increase of 29.8 million people (103 percent). The share of nonelderly people without insurance would increase from 11 percent to 21 percent, a higher rate of uninsurance than before the ACA because of the disruption to the nongroup insurance market.
- The percentage of uninsured among Americans with incomes at 200% and below the Federal Poverty Level would increase to over 26 percent.
- Of the 29.8 million newly uninsured, 22.5 million people become uninsured as a result of eliminating the premium tax credits, the Medicaid expansion, and the individual mandate. The additional 7.3 million people become uninsured because of the near collapse of the nongroup insurance market.
- If Congress eliminates the individual and employer mandates immediately, in the midst of an already established plan year, significant market disruption would occur. Some people would stop paying premiums, and insurers would suffer substantial financial losses (about $3 billion); the number of uninsured would increase right away (by 4.3 million people); at least some insurers would leave the nongroup market midyear; and consumers would be harmed financially.
- Eighty-two percent of the people becoming uninsured would be in working families, and 56 percent would be White, 22 percent Hispanic, 12 percent Black, 7 percent Asian, and 2 percent American Indian.
- There would be 12.9 million fewer people with Medicaid or CHIP coverage in 2019.
- Approximately 9.3 million people who would have received tax credits for private nongroup health coverage in 2019 would no longer receive assistance.
The analysis also includes estimates of the numbers of individuals who would become newly uninsured in each state.
If Congress proceeds to first defund the ACA through the budget reconciliation process without enacting any replacement policies to increase insurance coverage for another two or three years, there would no longer be any funding mechanisms for the costs of the replacement policies. Congress would have to raise new taxes, substantially cut spending, or increase the deficit.