Why Tax Reform May Be The End Of Obamacare

Amid the hoopla over the GOP Tax Reform bill (which still isn’t a tax increase), very little analysis has considered the likely effect on Obamacare, and the likelihood of an Obamacare repeal, now that tax reform has passed.

To understand why Tax Reform is a game-changer for Obamacare, you have to understand how the Congressional Budget Office works. The Congressional Budget Office (or CBO) provides analysis of bills in Congress, and projections on the effects of those bills. They’re considered the authoritative source by most news outlets, so the CBO score is a vital part of debate over any major legislation that affects the budget or the economy.

As it relates to Obamacare, the CBO deserves a massive amount of credit for both Obamacare’s initial passage and Republicans’ failure to repeal Obamacare this summer, despite controlling both houses of Congress and the White House. Let’s look first at Obamacare’s initial passage. The Congressional Budget Office was pivotal in two key ways: 1) Coverage Estimates and 2) Cost.

Let’s look first at coverage estimates: the CBO projected that a staggering 22 million people would get coverage on Obamacare exchanges. The real number? 10 million. Keep in mind that we’re talking about a situation where the government actually makes you pay a tax/penalty for not buying health insurance. So not only was the CBO wrong, but their wrong projection allowed Obama and the Democrats to claim that Obamacare was the solution to uninsured Americans.

Secondly, the CBO was dead wrong on the costs of Obamacare. They were way off on risk corridors, Medicaid Expansion, Insurer performance, and the overall effect on economic growth. It’s undeniable that without what can obviously be categorized as “extremely optimistic” CBO projections, passing Obamacare would have been much more difficult. What swing state Democrat would have wanted to run on the lackluster economic growth that followed Obamacare’s passage?

The CBO also deserves the lion’s share of the credit for stopping Obamacare repeal. In fact, only the Supreme Court can be said to have done more to save “SCOTUScare” than the CBO. This happened primarily with estimates on how Obamacare repeal would affect how many Americans have health insurance.

Sensational headlines flooded the airwaves alongside each iteration of Obamacare repeal, with supposedly non-partisan news anchors speaking in hushed tones of the instant dystopia that would result from Obamacare repeal. Behind all of these headlines? CBO projections. Here’s a sampling:

CBO: 16 million more uninsured under GOP ‘skinny’ repeal

‘Millions’ Fewer Would Have Coverage Under GOP Health Bill, Says CBO Analysis

CBO: Obamacare repeal bill would raise number of uninsured by 32 million by 2026

I’d be remiss not to mention the sleight of hand being used here: no one is having their health insurance taken away from them under any of the Obamacare Repeal bills. If you like your doctor, you really can keep your doctor. If you like your insurance, you really can keep your insurance. It’s not like any of these bills are Obamacare.

What’s behind those huge, scary-looking numbers from the CBO projections? The Individual Mandate. Obamacare included a mandate forcing every American to buy health insurance, or pay a penalty/tax if they don’t have insurance. Since all of the Obamacare Repeal bills included a repeal of the individual mandate, the CBO projects that approximately 13 million people will lose health insurance if the Individual Mandate is repealed. But I should stress the reason why: the CBO is projecting that there are 13 million people who only have health insurance now because the government is forcing them to buy it.

With all that explained, why does the Tax Reform make it much easier to repeal Obamacare? Because the Senate Bill includes a repeal of the individual mandate, and everyone expects the final version to include that repeal. The upshot is that with the Individual Mandate already repealed, the rest of Obamacare can be repealed without those scary-looking headlines, and without reporters asking questions like “Can you explain to your voters why you’re supporting a bill that will cause 16 million Americans to lose their health insurance?”

If you want to understand politics in America, you have to recognize that most Republicans scare easily. Democrats never have to be scared, because they know The Media will always cover for them, no matter how disastrously their policies fail the country, how many times their predictions didn’t come true, or how many times they made a promise they had no intention of keeping. Obama famously proclaimed his administration “scandal-free,” despite weaponizing the IRS against political enemies, literally spying on reporters, and literally giving guns to drug cartels.  Republicans never get such consideration, and have to defend every action against the most loaded possible questions.

So if you understand that 1) Republicans scare easily, 2) Republicans were loathe to repeal Obamacare if it meant facing scary headlines like “16 Million Will Lose Coverage,” and 3) Those headlines are not going to happen now because the Individual Mandate has already been repealed, where does that leave you?

With Obamacare Repeal being a nearly painless way to keep the Republican Party’s major campaign promise. It’s possible that Obamacare repeal may still sputter, but we can safely say that Obamacare has never been in more jeopardy than it is today. Tax Reform may really be the end of Obamacare.

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