According to a new CBO report, the repealing of the Obamacare individual mandate lowered the cost of CHIP.
The repeal of Obamacare’s individual mandate penalties in the tax bill has lowered the projection for how much the government will spend on medical coverage for children, according to a government report released Friday.
The Congressional Budget Office and the Joint Committee on Taxation predict that the repeal of the penalties for the individual mandate, which required people to buy health insurance or pay a fine, will lower the cost of the Children’s Health Insurance Program, or CHIP. The agencies project in their report that without the mandate fewer parents will sign their children up for CHIP than otherwise would have if it had remained in place.
As a result, enacting CHIP will become less expensive than previously thought. It is projected to increase the deficit by $800 million over a decade, $7.3 billion less than estimates calculated in October, ahead of the tax bill’s passage.
The individual mandate was billed by supporters as a necessary policy to encourage more people to sign up for health insurance coverage and help lower overall costs. It was supposed to be a mechanism to encourage healthier people, who would otherwise choose not to become insured, to sign up for coverage.
Previous CBO estimates have projected that 13 million more people would be uninsured without the mandate, saving the government $338 in subsidies, but the agency is re-evaluating its projections amid criticism that it overstated the mandate’s impact. A Standard & Poor’s projection estimates that without the mandate the number of uninsured would increase by 5 million or fewer people.
The fact CHIP is going to cost less will make it much easier to come to a deal on. As reported CHIP was temporarily funded last month but the funding for the program will come up again and the cheaper it is the easier it will be for Democrats and Republicans to come to the table.