President Trump heralded the end of the individual mandate required under Obamacare during the State of the Union address on Tuesday night.
The tax reform bill passed in December removed the penalty for uninsured Americans, which is expected to drive up premiums, destabilize the insurance market, and send Obamacare in a death spiral.
“We eliminated an especially cruel tax that fell mostly on Americans making less than $50,000 a year, forcing them to pay tremendous penalties simply because they couldn't afford government-ordered health plans,” Trump said.
“We repealed the core of the disastrous Obamacare. The individual mandate is now gone. Thank heavens,” he added.
The $695 penalty for adults who are not insured remains in effect until 2019.
While the failed GOP-led effort to repeal and replace Obamacare proved to be a serious setback during Trump’s first year in office, the tax reform bill passed in December included a measure to remove the penalty enforcing the individual mandate.
Doing away with the mandate is expected to drive premiums up by 10%, and increase the number of uninsured Americans by 13 million people by 2027, according to the Congressional Budget Office.
While the individual mandate has frequently been described as one of three crucial elements propping up Obamacare (tax subsidies for coverage and protections for preexisting conditions being the two others), some experts remain optimistic that its removal will not serve as a fatal blow to the policy.
Tax subsidies for coverage and protections for preexisting conditions — the two remaining legs of the Obamacare stool — remain in place, along with Medicaid expansion and guaranteed “essential” health benefits.
On Tuesday night, Trump also announced his desire to do away with regulations for experimental treatment for terminally ill patients.
“We also believe that patients with terminal conditions, terminal illness, should have access to experimental treatment immediately, that could potentially save their lives. People who are terminally ill should not have to go from country to country to seek a cure. I want to give them a chance, right here at home,” Trump said.
He went on to add, “One of my greatest priorities is to reduce the price of prescription drugs.”