Fact Check: Did Obamacare Have a Record Number of Sign-Ups for 2018 Open Enrollment?

Americans signed up at record rates during the 2018 open enrollment period for former President Barack Obama’s signature health care law, Adam Hodge, former Democratic National Committee communications director, said on Fox News Tuesday.

“Obamacare is more popular now than it’s ever been,” Hodge said. “We’ve seen record sign-ups during the open enrollment period, that the Trump administration actually cut funding for and shortened the enrollment period.”


Twitter users also claimed Obamacare saw record sign-ups this year.

Verdict: False

The total number of sign-ups on HealthCare.gov during the 2018 open enrollment period is lower than previous years, although the pace of sign-ups was faster.

Fact Check:

About 8.8 million people signed up for 2018 health coverage on HealthCare.gov during this year’s open enrollment period ending Dec. 15, compared to 9.2 million sign-ups for 2017 coverage and 9.6 million for 2016 coverage.

HealthCare.gov provides Affordable Care Act individual health plans in 39 states. The remaining 11 states and the District of Columbia run state health exchanges, and may have later deadlines to sign up than the federal deadline. Total enrollment for Obamacare plans won’t be known until all exchanges are accounted for, but enrollment on state exchanges also lags behind previous years.

The New York Times claimed the 8.8 million number is surprising since President Donald Trump’s administration cut HealthCare.gov’s advertising budget by 90 percent and shortened the enrollment period to around 45 days, half the length as the 2017 enrollment period.

“It’s incredible how many people signed up for coverage this year,” Lori Lodes, a former Obama administration official and a founder of Get America Covered, told The New York Times.

Enrollment for 2018 did outpace the rate of sign-ups from prior years. More people signed up for plans on HealthCare.gov in the first week of the open enrollment period than in previous years, with more than 600,000 people selecting plans. In the final week, 4.1 million people signed up for coverage or were automatically renewed.

When asked to clarify his statement, Hodge said he was referencing the pace of sign-ups. “The pace of sign-ups were faster given the shorter enrollment period and the enrollments in the last week were likely the biggest on record,” Hodge told The Daily Caller News Foundation in an email. He did not say whether he would amend his on-air statement to clarify there was not a record number of total sign-ups.

Though HealthCare.gov enrollment for 2018 outpaced previous years, the week-to-week enrollment pattern was typical. In previous years with longer enrollment periods, sign-ups significantly slowed after December, mostly because early enrollees want coverage that starts Jan. 1.

The bulk of HealthCare.gov sign-ups were consumers renewing coverage, with 2.4 million new consumers for 2018 compared to 3 million new consumers for 2017 and 4 million new consumers for 2016.

Premiums for health plans offered on HealthCare.gov skyrocketed for 2018, due in part to the Trump administration eliminating cost-sharing payments to insurance companies. Premiums for the second-cheapest silver plan increased 37 percent from an average of $300 per month to $411 per month. Low-income Americans will get larger subsidies because of the price increase.

The new tax reform law repealed the individual mandate provision in the Affordable Care Act that required every American to have health insurance coverage or pay a fine. Republicans in Congress are deciding whether to continue with Obamacare repeal and replace efforts in 2018 or move on to other priorities.

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities for this original content, email licensing@dailycallernewsfoundation.org.

The post Fact Check: Did Obamacare Have a Record Number of Sign-Ups for 2018 Open Enrollment? appeared first on The Daily Signal.

Fact Check: Did Republicans ‘Essentially’ Repeal Obamacare?

President Donald Trump claimed the GOP tax bill that Congress passed Wednesday “essentially” repeals Obamacare.

“We—I hate to say this—but we essentially repealed Obamacare because we got rid of the individual mandate, which was terrible,” said Trump during remarks after passage of the bill.


Verdict: False

Republicans voted to repeal the individual mandate—the requirement that Americans buy health insurance or face a penalty—but left all other provisions of Obamacare in place.

Fact Check:

Republicans have long vowed to repeal the Affordable Care Act—the 2010 law that significantly expanded the rolls of Medicaid, created an insurance exchange with subsidies for low- and moderate-income people, and imposed new requirements on insurers and employers.

Congress successfully passed a repeal bill in 2015 only for it to be vetoed by then-President Barack Obama.

The legislation would have undone the Medicaid expansion—a provision that extended insurance to an additional 12 million people—and subsidies for the health insurance exchanges. It also would have repealed the individual mandate, employer mandate, and many of the taxes imposed on businesses.

Once Trump assumed office, repeated attempts were made to undo the law. A bill passed in the House would have rolled back Medicaid, removed the individual mandate, repealed key tax provisions, and offered tax credits instead of subsidized health plans on the exchanges.

Several iterations were called repeal even though they left large aspects of Obamacare intact. Congress ultimately failed to pass even a “skinny repeal,” which would have simply undone the individual and employer mandates.

Republicans in Congress were able to successfully undo that mandate Wednesday, but it was the only Obamacare provision touched by the tax bill.

Repeal of the individual mandate is certainly a significant victory for congressional Republicans; it’s one of the most controversial provisions of Obamacare. Yet the change is modest compared to prior Republican attempts at repeal.

Trump claimed that Republicans repealed Obamacare because the mandate was a “primary source of funding.” But the Congressional Budget Office estimated that only $35 billion in revenues would be lost over 10 years without the individual mandate.

Repeal of the 3.8 percent surcharge on capital gains and the 0.9 percent Medicare payroll tax, by comparison, could result in revenue losses over 10 years of $250 billion and $150 billion, respectively.

These sorts of revenue offsets will remain intact, however, and Congress will continue to subsidize the Obamacare exchanges and Medicaid expansion.

Some predict that repeal of the individual mandate may actually lead Republicans to shore up the Obamacare exchanges.

Despite a doubling of premiums in the private insurance market since 2013, the mandate did help reduce premiums by forcing younger, healthy Americans to enroll. Without it, the CBO predicts even higher premiums in the marketplace.

Republicans may introduce a legislative fix like the Alexander-Murray bill proposed earlier this year in an attempt to stabilize the exchanges. The fate of Obamacare, however, is far from certain.

The Trump administration has taken steps that undermine the health care law in recent months. It discontinued making subsidy payments to health insurers and slashed the budget for Obamacare enrollment efforts, among other changes.

The White House did not respond to a request for comment in time for publication.

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities for this original content, email licensing@dailycallernewsfoundation.org.

The post Fact Check: Did Republicans ‘Essentially’ Repeal Obamacare? appeared first on The Daily Signal.

Who Wouldn’t Have Coverage If the Obamacare Mandate Is Repealed

The prospect that Congress might zero-out Obamacare’s individual mandate penalty in the pending tax bill has sent Obamacare defenders into flights of pessimistic rhetoric, up to and including the charge that “thousands will die” as a result.

The argument by which that attention-grabbing conclusion is reached runs something like this:

  • Health insurance coverage reduces mortality.
  • The mandate expands insurance coverage.
  • Therefore, the mandate reduces mortality, and consequently, removing the mandate will increase mortality.

Indeed, none other than Harvard economist and former Treasury Secretary Larry Summers recently deployed that argument, claiming that eliminating Obamacare’s mandate tax penalty in the tax bill would result in the death of 10,000 people per year.

In response, University of Chicago economists Casey Mulligan and Tomas Philipson argued that research on the connection between insurance coverage and mortality has found no more than a weak linkage between the two. They note that part of the explanation may be “that lack of coverage does not necessarily imply lack of lifesaving care as hospitals cannot turn away emergency-care patients without coverage.”

Summers, joined by professor Jonathan Gruber of the Massachusetts Institute of Technology, a prominent “architect” of Obamacare, then fired back, doubling-down on Summers’ original claim.

At one level, this is a classic argument among academics—complete with each side accusing the other of basing its case on a “selective” use of evidence in the professional literature. What, however, should the rest of us make of it?

To start with, a recent review of the academic literature on the subject finds a mixed bag, but with the strongest link between coverage and health outcomes in cases where health insurance coverage improves access to care, “particularly among people with lower incomes and chronic conditions.”

That makes sense. Having health insurance makes less of a difference to people with higher incomes who can afford to pay for more of their medical care directly. Similarly, the difference between being insured versus uninsured appears to be marginal to the healthy person with an infrequent need for care—though going without health insurance can turn out to be a bad bet if a major illness or accident strikes.

That leads us to the crucial, practical question that this academic debate largely misses: Who are the people that would no longer have health insurance if the mandate penalty were repealed?

For that we turn to the source of the projected coverage losses: the Congressional Budget Office. Setting aside for the moment the—entirely separate—debate over the accuracy of the CBO’s specific numbers, the agency projects that eliminating the mandate penalty will result in roughly 13 million fewer Americans having coverage by 2027. Of that number, the CBO estimates that 5 million fewer people will be enrolled in individual market coverage; 5 million fewer in Medicaid; and more than 2 million fewer in employer group coverage.

Notice what the CBO is not saying. The CBO is not saying that those Americans will “lose” coverage. Rather, the CBO is saying—absent the mandate penalties—those Americans will voluntarily forego enrolling in health coverage.

The CBO is explicit on this point: “Those effects would occur mainly because healthier people would be less likely to obtain insurance and because, especially in the non-group market, the resulting increases in premiums would cause more people to not purchase insurance.”

This is a crucial point. Healthier people are less likely to die a premature or preventable death than unhealthy people, regardless of income or health insurance status.

That explains the CBO’s somewhat counterintuitive projection that, without a mandate penalty, millions of poor people will turn down the offer of free Medicaid coverage. The reason is they don’t think they need it (because they are healthy) and if they become ill and seek care at a hospital, they know the hospital will enroll them in Medicaid to get paid.

Indeed, it is also why, long before Obamacare came along, that there was a persistent and notable gap between the number of people eligible for Medicaid and the number of people enrolled in the program.

It also explains the CBO’s other counterintuitive projection: that eliminating the mandate penalty will generate higher tax revenues.

While not collecting mandate penalties brings in less revenue, the CBO projects there will be new revenues coming from the healthy people who decide to turn down tax-free employer health insurance in exchange for higher (taxable) cash wages. Presumably, the CBO thinks being healthy and very much alive are basic prerequisites for expecting those folks to generate additional tax revenues.

Repeal of the Obamacare mandate will not result in social catastrophe. Supporters of the mandate would have a more compelling argument if millions of poor and sick persons would be thrown out of their existing coverage, struggling with potentially fatal chronic illnesses and unable to get insurance to maintain continuous access to regular care. But that is not what the CBO is projecting.

The CBO’s argument is hardly compelling, to say the least, when the cohort of the future uninsured are healthy people who simply choose not to buy Obamacare coverage because they believe they don’t need it or want it.

However, while keeping the individual mandate in place is not the answer, there are actions lawmakers can take to make health insurance more affordable, and more flexible in terms of providing a wider variety of plans that match people’s needs with their desired prices.

Achieving this will require the elimination of costly federal rules that artificially drive up health insurance premiums; for instance, current mandates on what insurance plans must cover drive up prices for all, even those who would want a more limited health insurance plan.

Already, rising insurance costs today threaten continuation of health insurance coverage among millions of middle-class Americans in the individual and small group markets who are ineligible for taxpayer subsidies. It’s time for lawmakers to make changes that give cheaper insurance options for those who want it—and time to stop forcing all Americans to purchase expensive health insurance they may not need or want.

The post Who Wouldn’t Have Coverage If the Obamacare Mandate Is Repealed appeared first on The Daily Signal.

GOP Lawmakers Target Another Obamacare Mandate in States

Republicans in Congress are working to chip away at programs mandated under Obamacare following their inability to repeal the health care law.

Rep. Mark Meadows, R-N.C., and Sen. Ron Johnson, R-Wis., introduced a bill Tuesday to end what they called Obamacare’s “failing” plans that competed with private health insurers in the states.

“Multistate plans were a poorly conceived provision of an even more poorly conceived bill, Obamacare, and repealing these plans would be a good step toward getting our health care system back on track,” Meadows said in a written statement.

The plans create two national health insurance plans facilitated by the Office of Personnel Management to compete with insurance plans in each state, and are required in all 50 states.

“This mandate is the definition of government waste,” Johnson said in a prepared statement. “The program has failed to meet statutory requirements and is diverting necessary resources from what should be the OPM’s priorities, such as retirement and security backlogs. Congress needs to let the OPM focus on its job, eliminate this failed program, and work to ensure health care is more affordable for all Americans.”

Arkansas will be the only state to offer multistate plans in 2018, and Meadows, chairman of the conservative House Freedom Caucus, says the health care market would be better served without government interference.

Robert Moffit, an assistant director at OPM under President Ronald Reagan who is now a senior fellow for health policy studies at The Heritage Foundation, said that the fact Arkansas is the only state to offer the plan is telling:

It failed not only in terms of the metrics, in terms of generating insurer participation or coverage numbers, it failed to achieve its fundamental goal, which was to enhance competition in the health insurance exchanges. And the fact that it’s supposed to be in all 50 states and now only exists in Arkansas is a testimony to … the gravity of the monumental nature of this failure in public policy.

Meadows said government should not be part of the health care business.

“The OPM should not be in the business of contracting health insurance plans,” the North Carolina Republican said. “I’m grateful to work with Senator Johnson on this bill as we seek to restore common sense, market-based principles to our health care industry that will bring premiums and overall costs down and help make quality care affordable for all Americans.”

Democrats in the House and Senate passed Obamacare, formally known as the Affordable Care Act, without a single Republican vote in 2010, the second year of Barack Obama’s eight-year presidency.

Republicans have sought to repeal Obamacare on 70 occasions, and the House has voted over 50 times to repeal the law.

In a July 28 Senate vote, three Republicans—Lisa Murkowski of Alaska, Susan Collins of Maine, and John McCain of Arizona—blocked what lawmakers dubbed the “skinny repeal” of Obamacare.

Government has failed in its attempts to be a health insurance provider, Moffit said.

“The federal government has no business sponsoring health insurance plans to compete against other private sector plans in any case,”  he said.

The post GOP Lawmakers Target Another Obamacare Mandate in States appeared first on The Daily Signal.

Seniors Face Return of Obamacare Tax in 2018

The clock is ticking for the return of an Obamacare tax that opponents say will hit older Americans on fixed incomes particularly hard, costing them an extra $500 per couple.

“For seniors on fixed incomes, my heavens, it’s a real problem,” @60PlusAssoc says.

Congress hasn’t taken action to delay or eliminate the tax before Jan. 1, when a moratorium on it expires. In 2015, Congress acted on a bipartisan basis to postpone the tax, which dates to President Barack Obama’s second year in office.

“It’s not just seniors, but clearly seniors are more financially strapped. And $500 per couple might not seem like a lot, but for seniors on fixed incomes, my heavens, it’s a real problem,” Jim Martin, chairman of the 60 Plus Association, a conservative organization for senior citizens, told The Daily Signal.

The estimated average of $500 per couple is based on an October study by Oliver Wyman Health, a health research firm that says the tax would mean a “$255 increase per Medicare Advantage member (including Special Needs Plans and Employer Group Waiver Plans).”

Medicare Advantage is a supplemental benefits program in which more than 100 private insurers compete for customers within the federal Medicare program. It covers about one-third of all Medicare beneficiaries.

In 2010, when Democrats in Congress passed the Affordable Care Act, better known as Obamacare, the lawmakers included what the Internal Revenue Service calls the “health insurance provider fee.” Opponents call it the “health insurance tax,” or HIT.

The fee is a tax on health insurance companies, but the nonpartisan Congressional Budget Office projected the tax “would be largely passed through to consumers in the form of higher premiums for private coverage.”

“The bottom line is that HIT is a $12 billion tax annually on health insurance companies,” Martin said. “Guess what the companies are going to do? They’re going to pass it on.”

The 60 Plus Association launched a $500,000 TV ad campaign in November calling on Congress to block the Obamacare tax.

The tax collected $8 billion from insurers after going into effect in 2014. The tax doesn’t have a specific rate, but is set to grow every year based on the rate of growth in premiums. The Department of Health and Human Services sets the rate each year based on what it considers needed revenue.

Congress imposed the moratorium on the tax in 2015 to slow the rise in insurance premiums.

“It’s an excise tax with a twist that you’re raising a fixed amount of money, and therefore instead of the revenue from the tax varying, the tax rate varies,” Ed Haislmaier, a senior research fellow in health policy studies at The Heritage Foundation, told The Daily Signal.

Haislmaier continued:

If you have a fixed excise tax like gasoline, if people drive more and consume more gas, the government gets more revenue from the tax. This is one where it says the government wants to get X revenue and if people drive more, we’ll lower the tax and if people drive less, we’ll raise the tax, so that we always get the same amount of revenue.

So, it has this perverse effect, to the extent that fewer people buy insurance, the people that do buy insurance end up paying a higher rate.

Sen. Cory Gardner, R-Colo., who sponsored legislation to delay the tax for another year, spoke about it Wednesday to conservatives gathered in Washington at a meeting convened by Americans for Tax Reform.

In a formal statement after introducing the bill in September, Gardner said: “We need to look at every avenue we can to provide relief to the American people from the high costs created by the Affordable Care Act.”

Last month, Rep. Josh Gottheimer, D-N.J., touted his opposition to the coming tax in meeting with business owners in his district.

More than 20 percent of the health insurance tax falls on Medicare Advantage, according to the Better Medicare Alliance, an advocacy group for Medicare recipients.

“The HIT tax is applied to all private health insurance plans, but its impact on the senior population will affect those on a fixed income and [who have] less capacity to absorb higher taxes,” Robert Moffit, a senior fellow in health policy at The Heritage Foundation, told The Daily Signal. “This is another case where Obama misled the ordinary Americans on fixed income.”

The post Seniors Face Return of Obamacare Tax in 2018 appeared first on The Daily Signal.

Doomsday Will Not Follow Repeal of Obamacare’s Individual Mandate

Congressional repeal of Obamacare’s individual insurance mandate penalty is not tantamount to pressing the button on the doomsday machine.

Critics of the Senate tax bill say repeal of the mandate penalty to buy Obamacare coverage will result in a spike in premiums, an increase in the numbers of the uninsured, and a “collapse” of the health insurance markets. In other words, the individual mandate is the “glue” that holds Obamacare together.

The assumption: Millions of Americans will buy Obamacare coverage—regardless of whether they want it or like it—because the government forces them to do it, and penalizes them if they do not.

Do we have compelling evidence that this is, in fact, the case? No.

Do we have evidence that the mandate is not the “glue” holding everything together? Sure do.

No human behavior is inevitable, of course. That is why, in the case of the individual mandate, the certitude of its supporters is unwarranted.

If the mandate were such a powerful force in reducing the numbers of the uninsured, restraining premium growth, and contributing to a robust expansion of choice and competition in the health insurance markets, then almost four years of empirical evidence would verify that proposition. It does not.

Consider coverage. In their November 2017 assessment, the Congressional Budget Office estimates that repeal of the individual mandate would result in 10 million fewer insured Americans over the next 10 years, including 5 million persons who are getting “free” care through Medicaid.

Accessing even “free” goods and services requires federal coercion, apparently in the uniquely weird world of federal health policy. Since 2010, as noted by the White House and others, the Congressional Budget Office’s coverage projections—upon which future coverage reductions are based—have not only been wrong, but in many cases, spectacularly wrong.

Curiously, in their assessment, the Congressional Budget Office reports that the agency is now revising its methodology, and says that the “estimated effects on the budget and health insurance coverage would probably be smaller than the numbers reported in this document.”

That is progress.

The crucial policy question is this: Does the law’s individual mandate—and its penalties—drive coverage increases?

Examining coverage data from 2012 through 2014, researchers writing in the New England Journal of Medicine, including Professor Jonathan Gruber, observed,

“When we assessed the mandate’s detailed provisions, which include income-based penalties for lacking coverage and various specific exemptions and penalties, we did not find that the overall coverage rates responded to these aspects of the law.”

Gruber and his colleagues further noted that the tax penalties in place in 2014 ($95, or 1 percent of household income) were “modest” and that with the imposition of the 2016 penalties ($695, or 2.5 percent of household income), “the mandate may play a larger role over time.”

Well, no. When the 2017 option is, say, paying $695 or an average monthly premium of $393 combined with an average deductible of $4,328, the mandate is no more powerful as an economic incentive today than it was in 2014, when Gruber rendered his assessment. Meanwhile, despite the individual mandate, coverage levels have not only fallen dramatically below the Congressional Budget Office’s earlier projections, but they also appear to be levelling off.

Independent analyses, based on raw insurance data, show a continuing poor performance in private insurance enrollment. Over the 2014-2016 period, public and private enrollment grew by 15.7 million persons, according to a Heritage Foundation analysis, but 89 percent of that growth was attributable to Medicaid and Child Health Insurance Program enrollment.

Between 2014 and 2016, there was a significant drop in the number of “unsubsidized” persons in the individual market from 11.1 million to 9.4 million.

According to a recent report in The New York Times, in 2015, 6.7 million tax-filers (representing themselves or their families) simply paid the mandate penalty rather than buy the Obamacare coverage, and over 12 million tax filers claimed an exemption from the mandate penalty.

In 2016 alone, individual market enrollment actually declined by 583,000. The mandate, whatever else it is accomplishing, is not preventing the decline.

Consider also premiums. When Congress enacted Obamacare, the law’s supporters believed the individual mandate would compel dramatic participation in the markets, and the influx of new enrollees would stabilize premium growth.

Beginning in 2014, the first year of the law’s full implementation, consumers in the individual markets, with very few exceptions, were stunned by rate shocks. In 11 states, for young 27-year-olds, premiums more than doubled. And the same was true for older enrollees, aged 50, in 13 states.

Surveying the uninsured that year, Bankrate.com found that one-third of the uninsured planned to remain uninsured, and 41 percent of those responding claimed that the Obamacare coverage was “too expensive.”

The big “no shows,” from the beginning, were the younger and healthier enrollees that were supposed to enroll in the exchanges and spread the risk, and therefore restrain or even reduce the premium costs. Obama Administration officials initially expected 40 percent of their initial enrollment to be comprised of persons 18 to 34.

Never happened.

In 2015 and 2016, premiums continued to rise—a direct contradiction of President Barack Obama’s silly promise that the law’s enactment would mean that “typical” families would see a $2,500 reduction in their premiums.

In 2017, once again, Americans trapped in the Obamacare markets faced a 25 percent increase in the premium costs of both the standard and most popular plans in the exchanges. For 2018, based on the preliminary data, analysts with Avalere are projecting a 34 percent increase in the standard plans.

The big premium picture is depressing. Since 2013, Obamacare’s premiums for single coverage have averaged an increase of 99 percent, while family premiums have increased 140 percent. Whatever impact the mandate is having on the insurance markets, it is not restraining premium growth

The anticipated “market collapse” has, in fact, already happened, and the individual mandate did not prevent it. In 2013, there were 395 insurers in the individual markets. That number declined to 307 in 2015, and down to 218 in 2017.

Preliminary data indicates that insurer participation will fall further down to just 181 in 2018. The Obamacare exchanges were never real “markets” in the first place, but federally supervised regulatory agencies where private coverage is “private” in name only.

The individual mandate with its penalties is not, in fact, the “glue” that is holding Obamacare together. It never was.

The lifeblood of the law is the generous taxpayer insurance subsidies, which attract and maintain the historically sluggish enrollment. The muscle and bone of Obamacare is the massive federal regulatory regime that governs the state health insurance markets.

The state exchanges have not blossomed into robust insurance markets, rich in choice and competition, but have declined to the point that they are, in effect, stagnant, heavily subsidized federal risk pools, disproportionately populated by the poor and the sick.

While Obamacare has reduced cost shifting to hospital emergency departments through exchange subsidies and Medicaid expansion, the levels of private insurance enrollment that Obamacare’s defenders anticipated did not occur.

The vast majority of exchange enrollees getting taxpayer subsidies will continue to get the subsidies and retain their coverage, regardless of the mandate. But the danger for those middle-class Americans who don’t get subsidies is that they won’t be able to continue to afford coverage, regardless of the mandate.

The job of Congress is not to maintain a monumental policy failure. Rather, Congress needs to strike out in a new direction and make policy changes that will allow state health insurance markets to flourish, and create conditions that will encourage millions of Americans to purchase coverage because they value that coverage—not because the IRS threatens them with penalties.

The post Doomsday Will Not Follow Repeal of Obamacare’s Individual Mandate appeared first on The Daily Signal.

The Senate Voted to Kill Obamacare’s Individual Mandate. Why That Was a Wise Call.

Obamacare’s individual mandate to buy federally standardized health insurance is a tax, courtesy of the Supreme Court’s elaborate exercise in creative writing: National Federation of Independent Business v. Sebelius (2012).

Legislators should judge a law by its results, not by good intentions. The record is clear: This particular tax is both unworkable and unfair. The Senate’s decision last week to repeal it is thus sound policy.

The individual mandate tax is not working. Its policy objective is to increase enrollment in private coverage and deter un-insurance.

To accomplish this goal, the law says that any person who does not buy an Obamacare plan would pay an annual tax penalty equal to 2.5 percent of their household income or $695, whichever amount is greater.

The penalty extends to families, including an annual penalty of $347.50 for any child under the age of 18 with a maximum annual family penalty of $2,085. Penalties increase annually by the rate of inflation.

Consider the incentives. Those who insure must buy Washington’s standardized insurance products, whether they like them or not, where premiums for standard plans this year have increased—not by the simple rate of inflation, but by 25 percent on average nationwide.

Before their coverage kicks in, consumers are faced with deductibles this year that average $3,572 for single persons and $7,474 for families in the standard (“silver”) plans. If consumers instead buy the “cheapest” (“bronze”) plans on the exchange, they face an average deductible of $6,092 for single coverage and $12,383 for family coverage.

For millions of middle-class families, this is the equivalent of a second mortgage payment.

Incentives under current policy are therefore perverse. Paying the mandate’s tax penalties (and relying on hospital emergency room care if necessary) may be wrong or unwise, but it is a lot cheaper than forking over the big premiums and crazy deductibles.

Kaiser Family Foundation researchers estimated that persons without mandatory coverage in 2016 faced an average penalty of $738 per household, while upper income persons (legally ineligible for insurance subsidies) faced an average penalty of $1,450.

Obamacare’s Medicaid expansion is responsible for coverage increases, not mandate-driven private insurance. Most who buy “private” Obamacare coverage on the exchanges—more than eight out of 10 enrollees—get enormously generous taxpayer subsidies for insurance. They are not quaking in fear over the threat of mandate penalties.

Coverage considerations are important. In its latest contribution, the Congressional Budget Office estimates that, over the next 10 years, repeal of the mandate penalty would mean that 13 million fewer persons would have health insurance, including, weirdly, an estimated 5 million Medicaid enrollees who get “free” care.

To their credit, the professionals at Congressional Budget Office have repeatedly acknowledged the profound uncertainties surrounding their estimates on the impact of health policy changes, particularly in recent House and Senate reform legislation.

Let’s take those self-acknowledged uncertainties to heart.

The Congressional Budget Office’s key assumption is that this tax encourages people to buy Obamacare coverage. Logically, one can accept their estimates of future coverage reductions if, and only if, one accepts the their estimates of future coverage.

The problem is that, since 2010, Congressional Budget Office’s coverage projections have been spectacularly wrong. In 2016, for example, they projected 21 million people would be enrolled in the exchanges, but the actual number was roughly 11.5 million.

For 2017, as the White House reports, under Congressional Budget Office projections, there were supposed to be 25 million exchange enrollees—but only about 10.3 million persons enrolled. Not surprisingly, independent academic research also indicates that the mandate penalty has a relatively weak impact on increasing coverage levels.

If the Senate tax reform bill passes, will there be 13 million fewer insured in the next 10 years, as the Congressional Budget Office projects? Or, will it be the far less dramatic 3 to 5 million estimated by the independent analysts with S&P Global?

Who knows? In any case, the Congressional Budget Office’s past predictive performance should inspire no confidence.

A related reason why this tax is unworkable is simply that public officials are not prepared to vigorously enforce it. Based on 2015 data, 6.5 million Americans paid the mandate penalty rather than buy Obamacare’s high-cost coverage, and another 12.7 million were able to take advantage of the various exemptions from the mandate.

Curiously, the tax is also profoundly regressive, falling on middle to lower-income persons least able to absorb reductions in their disposable income. Based on the 2015 data, 79 percent of those who paid the tax penalty had annual incomes less the $50,000, while 37 percent of them had incomes less than $25,000.

Curiously, while campaigning against Hillary Clinton for the Democratic presidential nomination in 2008, Barack Obama himself opposed the individual mandate because he said that it would be unfair and unenforceable: “If a mandate was the solution, we could try that to solve homelessness by mandating everybody buy a house.”

Candidate Obama was right. President Obama was wrong.

Congress could, of course, preserve the mandate and toughen enforcement. While progressive policy analysts may talk privately about getting tough with non-compliant Americans (bulking up IRS enforcement, increasing the penalties, garnishing wages, and so forth), the law’s advocates in Congress have not shown the intestinal fortitude to advance such proposals.

Instead, they are promising more government spending, heavier government regulation, and yet another government health plan—a “ robust public option”—to erode further the already-shrunken choice and competition in the insurance markets.

Meanwhile, it’s absurd for Congress to preserve a law it will not enforce.

The real alternative to a government stick (the mandate tax) is a government carrot (regulatory reform)—a friendlier market environment, free of coercion, and characterized by robust consumer choice and competition; a market where people want to buy an affordable product that they determine is of value to them.

Younger and healthier people should not be discouraged from entering the health insurance market by government policy that limits their options and deliberately drives up their health insurance costs—policy that makes coverage unaffordable and undesirable.

Repealing the individual mandate penalty is sound policy. It is, however, only the first step in a hard process of carefully crafting insurance market reforms and allowing new health insurance markets to flourish—markets where individuals and families will control their health care dollars and decisions.

The post The Senate Voted to Kill Obamacare’s Individual Mandate. Why That Was a Wise Call. appeared first on The Daily Signal.