CBO: Individual mandate delay would cut billions from federal deficit
A bill delaying healthcare reform's individual mandate would lower the federal deficit by about $35 billion from 2014 to 2023, according to a new estimate from the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT).
Title I of H.R. 2668 would push back by one year the individual mandate as well as the schedule of penalties for people who don't comply with the mandate. Title II would codify the Obama administration's decision to delay for a year the mandate for larger employers to offer health coverage for their workers.
The Republican-led U.S. House of Representatives passed the measures on July 17, although it's unlikely the legislation will pass President Barack Obama's veto threat or the Democratic-led Senate.
If the government does enact delays to implement the individual mandate and employer mandate under H.R. 2668, the projected savings would stem from a $28 billion drop in direct spending and a $7.4 billion net increase in revenues during that period, according to the full CBO and JCT report.
The report also estimates delaying the individual mandate would add 11 million more people to the uninsured population in 2014, for about 55 million uninsured people that year.
And without the mandate in 2014, tax revenues would increase by roughly $12.2 billion because fewer people would assume employment-based health insurance coverage--that would make a larger share of total compensation take the form of taxable wages and salaries while a smaller share would appear as nontaxable health benefits, according to the report.
The individual mandate is still proceeding as planned and as of August, the Internal Revenue Service finalized penalties for individuals who do not obtain health insurance under the healthcare reform provision. While the final rules do make some exceptions to the individual mandate, the IRS will fine nonexempt individuals without coverage $95 per person or 1 percent of household income in 2014, FierceHealthPayer previously reported. The penalty for not obtaining coverage jumps to $325 or 2 percent of income in 2015 and either $695 or 2.5 percent of household income in 2016.
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