On December 20, 2017, the proposed tax reform bill, H.R. 1, developed by Republicans, passed both houses of Congress after the U.S. House of Representatives voted in favor of a reconciled Senate-version of H.R. 1.¹ The bill, which was signed on Friday, December 22, 2017, by President Donald Trump, will repeal the tax penalties associated with the Individual Mandate, a provision within the 2010 Patient Protection and Affordable Care Act (ACA), a/k/a Obamacare.² The Individual Mandate required most individuals to maintain health insurance coverage, or face a tax penalty (the 2017 tax penalty was $695 per adult, $347.50 per child, or 2.5 percent of household income, whichever was greater).³ This provision was originally intended to lower the average price of health insurance by incentivizing the enrollment of healthy (and therefore less expensive) individuals in the health insurance market.⁴

1. Penalties associated with the Employer Mandate, an ACA provision requiring large employers to provide minimum essential coverage for full-time employees, have not been repealed; and,⁵
2. The other provisions of the ACA will not be affected by the tax reform bill, e.g., pre-existing conditions coverage, Medicaid expansion.⁶

The repeal of this provision will not take effect until 2019, and the ultimate effect it will have on future marketplace enrollment is uncertain.⁷ The repeal of the tax penalties associated with the Individual Mandate is estimated by the nonpartisan Congressional Budget Office (CBO) to decrease the federal budget deficit by $338 billion between the years of 2018 and 2027, but increase the average premium in the non-group insurance market by 10 percent.⁸ Additionally, the CBO estimates that the number of individuals without insurance will increase by four million in 2019 and by thirteen million by 2027.⁹ It is important to note, however, that this estimate may be overstated, as other independent analysts have predicted coverage losses of only three to five million individuals by 2027.¹⁰ These widely varying estimates may be attributed to the fact that there is no precedent for the repeal of such as provision.