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What is "Skinny Repeal?"

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UPDATE: Early Friday morning the Senate voted down the “skinny repeal” initiative. The bill failed 51-49, with Republican Senators John McCain, Lisa Murkowski, and Susan Collins voting against it along with the entire contingent of Democrats.

While Congress struggles to find viable options to repeal and/or replace the Affordable Car Act, the latest proposal being put forward is called the “skinny repeal.” The premise is that a few narrow revisions to  the ACA would be a step toward eventually making major changes.

The details of the “skinny repeal” proposal have not been released to the public leaving the particulars somewhat ambiguous. The Senate is likely to vote on a variety of amendments at the end of the debate process.  While the change may not be substantial, there is pressure on Congress to make some progress towards a revised healthcare program.

Pundits speculate that the skinny bill will focus on eliminating mandates for individuals to obtain insurance coverage and for remove the requirement for employers to provide it. The proposal would remove the financial penalty for non-compliers. While it is expected that most of the ACA taxes will remain intact, there is speculation that the 2.3% excise tax on medical devices could be eliminated. ACA taxes on insurance and pharmaceutical companies would likely remain.

The elimination of the individual mandate would open the door for young and healthy individuals to abandon their insurance plans. The absence of healthy participants would shift the cost burden to insured individuals who are in need of coverage. The Congressional Budget Office (CBO) estimated that insurance premiums would be 20% more expensive without the individual mandate.

The skinny repeal could have major consequences on the ACA. Removing the individual mandate could push insurance marketplaces to lose scores of participants and lead to major upheaval. The CBO has projected that repealing the individual mandate could lead to 16 million fewer Americans having health coverage in a decade. They also forecast a government savings of over 400 billion over that period.

NOTE: None of the “skinny repeal" bill proposals eliminate the mandate for ACA filing to the IRS or submission of Form 1095 to participants. ACA Reporting will still be required for TY2017.

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