Mandatory Spending Option

Function 550 - Health

Repeal the Individual Health Insurance Mandate

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

The Affordable Care Act (ACA) includes a provision, generally called the individual mandate, that requires most U.S. citizens and noncitizens who lawfully reside in the country to have health insurance meeting specified standards and that imposes penalties on those without an exemption who do not comply.

CBO and JCT estimate that repealing that mandate starting in 2019—and making no other changes to current law—would have the following effects:

  • Federal budget deficits would be reduced by about $338 billion between 2018 and 2027.
  • The number of people with health insurance would decrease by 4 million in 2019 and 13 million in 2027.
  • Nongroup insurance markets would continue to be stable in almost all areas of the country throughout the coming decade.
  • Average premiums in the nongroup market would increase by about 10 percent in most years of the decade (with no changes in the ages of people purchasing insurance accounted for) relative to CBO’s baseline projections.