The Washington PostDemocracy Dies in Darkness

The Health 202: Republicans are right. The individual mandate is a tax on the poor.

with Paulina Firozi


Republicans are right: Slashing Obamacare’s requirement to buy health insurance amounts to a tax cut for low-income Americans. Instead, it’s higher-income people who would be hurt by the move.

As House and Senate Republicans advance their respective tax bills in a race to pass them before the end of the year, a heated debate is emerging over whether eliminating the Affordable Care Act’s individual mandate would help or hurt Americans. Under the ACA, people who lack coverage must pay a fine of either $695 or 2.5 percent of their household income, whichever is higher.

As things stand, the Senate tax bill repeals the mandate – language President Trump heavily pressured Republicans to include as he keeps seeking to dismantle the ACA. Even so, the White House is prepared if the mandate must be stripped out for a tax overhaul to pass, Office of Management and Budget Director Mick Mulvaney conceded yesterday.

White House budget director Mick Mulvaney said on Nov. 19 that they would remove the repeal of Obamacare's individual mandate if "a good tax bill can pass." (Video: Reuters)

“If we can repeal part of Obamacare as part of a tax bill and have a tax bill that is still a good tax bill, that can pass, that’s great,” Mulvaney said on CNN’s “State of the Union.” “If it becomes an impediment to getting the best tax bill we can, then we are okay with taking it out.”

Mulvaney probably had in mind Sens. Lisa Murkowski of Alaska and Susan Collins of Maine -- two moderate Republicans who helped sink the GOP health-care bill – who appear hesitant to vote for repealing the mandate without doing anything else to improve Obamacare.

“I don’t think that provision should be in the bill,” Collins said, also on “State of the Union.” “I think the Senate should follow the lead of the House and strike it.”

Last week, Murkowski told Roll Call she wouldn’t vote for mandate repeal without first passing the bipartisan Alexander-Murray compromise to stabilize the ACA marketplaces. Per Bloomberg News's Sahil Kapur:

But Murkowski backpedaled Friday, saying in a statement that although passing Alexander-Murray is important, she’s not necessarily conditioning her support for the Senate tax bill on it.

“One should not assume this is a precondition for my support for the tax bill,” Murkowski said. “I plan to look at the entire package before coming to any conclusion on the legislation.”

If repeal of the ACA’s individual mandate survives in the Senate tax bill, here’s the message Republicans will be shouting from the rooftops: It’s overwhelmingly lower-income Americans who pay the penalty for being uninsured. So repeal of the mandate amounts to a tax cut for them, in their eyes.

“The fact of the matter is that the individual mandate is a tax on the poor and working class,” Sen. Tim Scott (R-S.C.) said on the Hugh Hewitt Show on Wednesday.

From the press office of Senate Finance Committee Chairman Orrin Hatch (R-Utah):

Senate Majority Leader Mitch McConnell (R-Ky.):

Sen. Pat Toomey (R-Pa.):

The thing is, Republicans are right, if you listen to the Supreme Court and the IRS. The high court ruled back in 2012 that the penalty for being uninsured is the same thing as a tax. That’s exactly how Chief Justice John G. Roberts Jr. was able to rule that the mandate – and thus the entire ACA – was constitutional because of the federal government’s authority to tax its citizens.

And the penalty is paid chiefly by lower- and middle-class Americans, according to the IRS. More than half the total penalty payments – 58 percent – come from people earning less than $50,000. Eighty-six percent is from people earning less than $100,000. We should note, however, that these figures represent adjusted gross income, meaning the actually earnings threshold is somewhat higher. And only a tiny percentage of Americans -- only four percent of those earning $25,000 or less, for example -- actually pay a penalty at all.

Democrats and other ACA advocates are arguing that eliminating the penalty would hurt lower-income Americans because fewer people would buy coverage overall – about 13 million fewer Americans over a decade, according to the Congressional Budget Office.

Senate Minority Leader Chuck Schumer (D-N.Y.):

But that argument assumes that Obamacare plans aren’t attractive enough for people to keep buying them voluntarily. It seems unlikely that low-income Americans eligible for subsidies would drop their coverage without the mandate -- because they’d still be able to access the same subsidies as before. The ACA is designed to make coverage affordable for people in the lower-income brackets by shielding them from the full cost of premiums.

But there is definitely a segment of the population that could suffer without the mandate. The people who are already bearing all the costs of Obamacare plans. These are the people who earn too much to qualify for a subsidy (that is, who earn at least 400 percent of the federal poverty level) and must therefore endure the full brunt of premium hikes.

In the absence of the mandate, some healthy people who don’t feel they need coverage would probably drop out of the market, resulting in higher premiums for everyone else. The CBO has said that average premiums in the individual market would increase by about 10 percent in most years, were the mandate struck from the books.

Collins expressed precisely this fear yesterday on CNN.

“The fact is that if you do pull this piece of the Affordable Care Act out, for some middle-income families, the increased premium is going to cancel out the tax cut they would get,” she said.

That reality creates a strange irony if Congress both repeals the individual mandate and passes the Alexander-Murray bill to stabilize the marketplaces by the end of the year (its chief provision would extend federal payments for cost-sharing subsidies that benefit low-income Americans). The first action would boost Obamacare premiums, while the second would lower them. Go figure.


AHH: Six years into the Affordable Care Act, about 9 percent of the U.S. population remains uninsured. That's according to new numbers released Thursday by the National Center for Health Statistics, which found that 28.8 million people lacked coverage from January to July this year. Still, the uninsured rate is down dramatically from the period right before the ACA, when 16 percent of the population was uninsured.

--The number of people enrolling in high-deductible health plans keeps going up, up, up. In the first six months of this year, 42.9 percent of people were enrolled in such plans, compared to 39.4 percent in 2016.

OOF: Law enforcement officials and medical professionals say that counterfeit opioid pills have been flooding the illicit drug market and have been sickening — and killing — people seeking out powerful prescription drugs amid the worsening national opioid crisis, The Post's Katie Zezima reports. Users who believe the prescription drugs are safe — because they're regulated by the FDA — could now unwittingly end up ingesting potent cocktails of unknown substances. In many places, the pills contain fentanyl, a synthetic drug that is driving a nationwide surge in overdose deaths.

"The rise of counterfeit pills is in part a consequence of well-intentioned actions taken to prevent overdose deaths; as states enact strict prescription limits and closely monitor doctors, fewer authentic painkillers are available," Katie writes. "While some opioid abusers turn directly to heroin or fentanyl, the cartels and drug dealers are filling the void, and meeting demand, with pills they have manufactured to look like the originals."

And that trade is in­cred­ibly lucrative. "One kilogram of illicit fentanyl — far cheaper than heroin or oxycodone — can produce 1 million counterfeit pills, netting $10 million to $20 million in revenue, according to the DEA," Katie continues. "The pills also are filled with fentanyl analogues — different formulas of the drug concocted to skirt U.S. drug laws — and other chemicals that evade drug screenings and have unknown effects on the human body, until people like those in Macon overdose."

OUCH: A new study finds a link between a spike in symptoms of depression and suicide rates among U.S. teens and their increased use of smartphones. Adolescents in "iGen" -- the generation born after 1995 -- are more likely to experience mental health issues than their predecessors, the millennial generation, Jean Twenge, a professor of psychology at San Diego State University, writes for The Post about her paper published in Clinical Psychological Science.

Not only did the use of smartphones and the rate of depression increase concurrently between 2010 and 2015, but teens who spent five or more hours online were 71 percent were more likely to have at least one suicide risk factor than teens who only spent an hour a day online, Twenge notes. Those factors include depression, thinking about suicide, making a plan or attempting suicide. Overall, those risk factors spiked after two or more hours online per day. Even if time spent online doesn’t directly harm mental health, Twenge writes, there could be indirect effects such as limiting in-person interaction.

Of course, genetic predisposition, family environments, bullying and trauma affect whether teens have depressive symptoms. But too much screen time can be a trigger. Twenge writes that “some vulnerable teens who would otherwise not have had mental-health issues may have slipped into depression because of too much screen time, not enough face-to-face social interaction, inadequate sleep or a combination of all three.”


--Several Senate Republicans met with President Trump at the White House last Thursday to urge him to support the bipartisan Alexander/Murray bill to bolster the ACA marketplaces, chiefly by funding extra payments that cover cost-sharing discounts insurers must give the lowest-income customers (affectionately known as "CSRs"). Politico reported that the meeting included Sens. Lindsey Graham (S.C.), Lamar Alexander (Tenn.), Susan Collins (Maine) and Bill Cassidy (La.), who told Trump that repealing the individual mandate without passing Alexander/Murray would cause havoc in the individual insurance market.

“It would be a very bad idea to repeal the individual mandate and not pass Alexander-Murray,” Alexander said last week, per Politico. 

A White House spokesman told Politico that the president and the senators “discussed the ongoing efforts to pass historic tax reform and other legislative objectives."

“The president is pleased with the momentum that has gathered behind finding solutions to these important issues and looks forward to continued cooperation with Congress in order to enact them as soon as possible,” the spokesman said.

After a flood of charity events left Mar-a-Lago, pro-Trump groups are trying to make up the lost business. (Video: Jenny Starrs/The Washington Post, Photo: Scott McIntyre/The Washington Post)

--Gone are the days of the white-tie Red Cross Ball and quartets playing Mozart at Mar-a-Lago in Palm Beach, Fla. When Trump returns to his resort this week for the first time since April, he will confront a changed social scene. The resort now has a political client base, David Fahrenthold, Drew Harwell and Lori Rozsa report for The Post. Nineteen charity organizations pulled scheduled events at the venue this summer after Trump defended participants in the violent white supremacist-organized rally in Charlottesville. Among them was the Red Cross, which had previously held events at the resort for 60 years.

So who is still booking events at Trump’s private Florida resort? Some of the political groups that have replaced the previous lineup of clients include The Republican Attorneys General Association, the Young Republican National Federation, the Christian Broadcasting Network and the Trumpettes USA. 

"Once a retreat from the divisive business of politics, the Palm Beach landmark is now a place defined by those divisions — a dynamic the club is monetizing by booking events with Trump’s political allies," David, Drew and Lori write. "Mar-a-Lago is still hosting weddings and members for meals on the dining terrace. But the center of Palm Beach’s traditional social scene has shifted to the Breakers, a club that Trump once mocked for getting his 'leftovers.'"

“People will still put on their dancing shoes, and pay big money for their tickets, and go out for the night. [But] instead of going to Mar-a-Lago, they’ll be going to the Breakers,” said Shannon Donnelly, the society editor for the Palm Beach Daily News.


--This week, the pro-ACA group Save My Care is launching a five-figure digital ad campaign against 14 House Republicans who voted for the tax overhaul last Thursday. The ads highlight how the bill pulls back the tax deduction for people with steep medical expenses and enacts deep cuts to future Medicare spending -- and notes that the Senate version would repeal the individual mandate to buy insurance.

The ads will target Virginia Reps. Dave Brat, Jeff Denham and Barbara Comstock, Colorado Rep. Mike Coffman, Pennsylvania Rep. Ryan Costello, Texas Rep. Will Hurd, Ohio Rep. David Joyce, New York Rep. John Katko, Maine Rep. Bruce Poliquin, Florida Rep. Ileana Ros-Lehtinen, Illinois Rep. Peter Roskam and California Reps. Ed Royce, David Valadao and Mimi Walters.

An example of the ad:

Last week, Save My Care began airing television ads in Alaska, Arizona and Maine, urging Sens. Lisa Murkowski, John McCain and Susan Collins to vote against the tax bill and noting that the three voted against the Senate health-care bill.

A few more choice reads from The Post and beyond:

Trump Economists Say Opioid Crisis Much Bigger Than Envisioned (Bloomberg)

David Shulkin: Fixing VA 'a matter of national security' (Washington Examiner)


The truth behind the ‘first marijuana overdose death’ headlines (Ellie Silverman)

Jesse Jackson says he has been diagnosed with Parkinson’s disease (Mark Berman and Vanessa Williams)


Former top Justice official went to bat for drug giant Cardinal Health (Lenny Bernstein and Scott Higham)


Arizona Supreme Court upholds state's Medicaid expansion (The Hill)



  • The House and Senate are out this week for the Thanksgiving holiday.
  • The American Enterprise Institute holds an event about “The future of delivery system reform.”

Coming Up

  • The Senate Health, Education, Labor and Pensions Committee holds a hearing on the nomination of Alex Azar to serve as the Secretary of Health and Human Services on November 29.

Politicians weigh in on taxes and the fate of the individual mandate:

Democrats, a few crucial Republicans and White House officials disagree over important aspects of the current Senate GOP tax plan. (Video: Jenny Starrs/The Washington Post)

Watch Saturday Night Live's cold open on Donald Trump Jr.'s relationship with WikiLeaks:

Why Trump ignores allegations against Moore and himself, but attacks Sen. Al Franken (D-Minn.):

President Trump is ignoring the women who have accused him and Senate candidate Roy Moore of harassment or assault, but attacking Sen. Al Franken (D-Minn.). (Video: Jenny Starrs/The Washington Post)

Saturday Night Live addresses the allegations against Sen. Al Franken (D-Minn.):