Larry Summers, the treasury secretary during the Clinton administration, said “thousands would die” because of the Republican tax plan that is making its way through Congress before President Donald Trump signs it into law as early as this month.
The plan will eliminate Obamacare's individual mandate that requires people to buy health insurance or face federal penalties. The repeal likely will lead many people to forgo a health plan. Many taxpayers already choose to pay the penalty instead of buying health insurance — the average penalty per person was estimated at $708 this year, according to preliminary data cited by the New York Times.
Summers said he based his grim assertion on the work by another economist, Kate Baicker, who served on the Council of Economic Advisers during the administration of President George W. Bush. She now is dean of the Harris School of Public Policy at the University of Chicago.
Baicker wrote two peer-reviewed studies about how losing health insurance affected mortality rates. One study focused on Massachusetts and found that one out of 176 people died from losing insurance. A second study of New York, Arizona and Maine found that one out 830 people died from the loss of insurance.
“The Congressional Budget Office estimated that the tax bill could reduce insurance coverage by 13 million people, which to be conservative we can round down to 10 million people,” Summers wrote in a blog for the Financial Times. “If we treat the 176 to 830 range as implying that it is safe to assume that 1,000 more uninsured means one death, the conclusion would follow that the tax bill would result in 10,000 extra deaths per year.”
Summers said there are many issues that can affect such an outcome.
“Do changes in private insurance from repealing the mandate have more or less potent effects than changes in Medicaid coverage?” he asked. “How do the effects play out over time? Are there compelling contrary studies?”
While people are still free to buy health insurance even if the federal government doesn’t require them to do so, Summers cites two reasons for why they likely won’t.
“First, for many, the loss of health insurance will not be voluntary: They will lose coverage because premiums will increase, pricing them out of the market,” he said. “Second, I take seriously the insights of behavioral economics, which suggest that irrational actors may make choices that will lead to worse health outcomes, and higher mortality rates.”
If anything, an estimate of 10,000 deaths may be too conservative, he said.
The Senate's tax bill that was passed on Dec. 2 has many differences from a version the House approved two weeks earlier, which means that a joint conference committee will have to iron out an agreement.
Both houses have to approve identical bills before Trump can sign it. Trump has said he wants a bill by Christmas, and Saturday's Senate vote keeps the GOP on that schedule.
Polling has shown that the individual mandate is one of the least popular parts of Obamacare, as the Affordable Care Act is commonly called. President Barack Obama approved the law on March 23, 2010, in the most sweeping overhaul to the nation's healthcare system since the 1960s.
Supporters of the individual mandate say it helps insurers offer lower rates to customers because it creates an impetus for healthier customers to buy coverage, which helps pay for the costs of sicker, more expensive enrollees, the Washington Examiner reported.
A Congressional Budget Office report projected that 13 million more people would be uninsured if the mandate is repealed, but the nonpartisan agency is re-evaluating its estimate. A Standard & Poor's forecast pegged the number at 5 million or less.
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