GOP senators giving tax bill a health rider
Insurance mandate repeal touted as middle-class relief
WASHINGTON — Senate Republican leaders are adding a provision to their tax bill that would undermine the Patient Protection and Affordable Care Act, as they now try to accomplish two of their top domestic priorities in a single piece of legislation.
Sen. Orrin Hatch, chairman of the Finance Committee, confirmed late Tuesday that he was revising the bill to include the repeal of the Affordable Care Act’s individual mandate — a central piece of the 2010 law that compels most Americans to buy health insurance or pay a fine — “to help provide additional relief to low- and middle-income families.”
“We are optimistic that inserting the individual mandate repeal would be helpful; that’s obviously the view of the Senate Finance Committee Republicans,” Senate Majority Leader Mitch McConnell, R-Ky., said earlier Tuesday, after meeting with party members during a pri-
If it becomes law, the repeal would save more than $300 billion over a decade but result in 13 million fewer Americans being covered by health insurance by the end of that period, according to the Congressional Budget Office. Republicans said Tuesday that they would use the savings — which stem from reduced government spending to subsidize health coverage — to pay for an expansion of the middle-class tax cuts that lawmakers had proposed.
To be protected from a Democratic filibuster, the tax bill can add no more than $1.5 trillion to the federal budget deficit over a decade. Republicans hope the more than $300 billion would help offset that limit.
Attempting to use the tax bill to repeal the mandate marks an abrupt shift in strategy as Republicans attempt to use a slim Senate majority to pass an overhaul of the U.S. tax code. It scrambles an already complicated calculus as Republican leaders look to assemble the 50 votes they’d need to turn their tax bill into law.
Using the bill to attack former President Barack Obama’s signature legislative achievement likely rules out the already slim possibility of support from Senate Democrats, and the prospect of adding millions to the ranks of the uninsured will likely trouble some of the same moderate Republicans who voted down previous repeal efforts.
President Donald Trump pressed Congress to include the repeal in their tax efforts in a Twitter post Nov. 1, but it was received coolly by GOP leaders who feared the same health care politics that sunk their previous Affordable Care Act repeal attempts would torpedo their tax effort.
Trump and many GOP lawmakers have supported using the tax bill to repeal the mandate, a part of the health care law that creates penalties for some Americans who don’t buy health insurance. But until Tuesday, Republicans had resisted making the change, worried that injecting health care politics would imperil the tax bill.
Sen. Susan Collins, R-Maine, one of the Republicans who opposed previous attempts to roll back the health care law, said she was concerned about including the mandate repeal while the Senate was still addressing a health care compromise negotiated by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash.
“I personally think that it complicates tax reform to put the repeal of the mandate in there, particularly if it’s done before the Alexander-Murray bill passes because of the impact on premiums,” Collins said. “I’m going to see what the bill says.”
The updated tax bill could, however, include provisions of the new bipartisan health care agreement, according to Collins and Sen. Bob Corker. R-Tenn.
Sen. John Thune, R-S.D., chairman of the Senate Republican Conference and a member of the finance committee that is drafting the tax bill, said repeal would allow the GOP to further cut taxes for middle-income families.
“It’ll be distributed in the form of middle-income tax relief,” Thune said. “It will give us even more of an opportunity to really distribute the relief to those middle-income cohorts who could really benefit from it.”
Sen. Tom Cotton, R-Ark., said in a statement Tuesday that he’s glad to see the Senate Finance Committee targeting the individual mandate.
“Repealing the mandate pays for more tax cuts for working families and protects them from being fined by the IRS for not being able to afford insurance that Obamacare made unaffordable in the first place,” the Republican from Dardanelle said.
He continued: “I urge the House to include the mandate repeal in their tax legislation.”
House GOP leaders have said they would explore whether to include a repeal
of the individual mandate in their version of the tax cut bill, but they have so far not made that change.
Sen. Minority Leader Charles Schumer said including a repeal of the mandate in the tax bill would torpedo Democratic support for the Murray-Alexander compromise.
“We don’t need to trade it for a tax bill, and we won’t,” he said.
Sen. Ron Wyden, D-Ore., the top Democrat on the Senate Finance Committee, slammed the decision to include the mandate’s repeal, saying it would “cause millions to lose their health care, and millions more to pay higher premiums, all to pay for more tax breaks for multinationals.”
Repealing the mandate would undermine other key parts of the Affordable Care Act.
The health care law banned insurance companies from discriminating against people with pre-existing health conditions. But in order to prevent people from waiting to buy insurance until they got sick, the law also imposed financial penalties for individuals who did not maintain health insurance coverage.
Health experts say eliminating the mandate would destabilize the individual insurance markets set up by the Affordable Care Act, because they would be full of people with high health care costs but have far fewer of the healthy people that insurance companies depend on to stay profitable. In response, insurance companies would likely either significantly raise premiums or pull out of the marketplaces entirely.
A powerful group of stakeholders, including the major health insurance and hospital insurance lobbies and two influential doctors’ groups, wrote a letter to leaders of both parties arguing that they should retain the individual mandate.
“There will be serious consequences if Congress simply repeals the mandate while leaving the insurance reforms in place: millions more will be uninsured or face higher premiums, challenging their ability to access the care they need,” the groups wrote.
Repealing the mandate would free up new revenue, because fewer people with health insurance would mean the government would spend less on insurance subsidies, according to Congressional Budget Office projections. But Republicans appeared to give differing explanations for what they would do with that money.
McConnell, speaking at an event hosted by the Wall Street Journal, said the repeal would allow them to ensure corporate tax cuts remain permanent and also to lower taxes for middle-class families.
Trump, however, has said the repeal should be focused on getting income tax rates
down for the wealthy, with any leftover money going toward cutting taxes for the middle class.
Cotton and Sen. Rand Paul, R-Ky., had called for the repeal as part of the tax overhaul. Paul said Tuesday morning that he would introduce his own amendment to the tax bill that would repeal the individual mandate and use the savings to lower taxes for middle-class families.
“The mandate repeal is a promise we all made, and we should keep,” Paul said.
The tax bills in the House and Senate would lower taxes for many Americans, but nonpartisan analysts have concluded that millions would pay higher taxes, particularly if they live in states such as New York, New Jersey and California.
Those analyses have also concluded that the biggest beneficiaries of the bills would be corporations and the very wealthy.
The addition of the mandate repeal again forces Republicans to grapple with their own internal divisions over health care. GOP lawmakers spent much of the first eight months of 2011 trying to repeal or roll back the Affordable Care Act. But they were repeatedly stymied by GOP defections in the Senate, with a handful of Republicans saying they wanted the changes to be either more sweeping or done in a bipartisan way.
Republicans control 52 votes of the 100-seat Senate, and so the loss of support of three of their members would imperil any changes to the bill. They are trying to pass the tax cut bill through a process known as reconciliation, which means they would need only 50 votes — plus, if necessary, a tie-breaking vote from Vice President Mike Pence — to pass the bill.
The House and Senate must pass matching versions of the tax cut bill in order for Trump to be able to sign them into law.
House leaders are hoping to vote on their version of the measure as soon as Thursday. House Speaker Paul Ryan, R-Wis., projected confidence earlier in the day about delivering the legislation.
“This bill will make things better for hardworking Americans,” Ryan told reporters.
The Senate Finance Committee is debating their version of the tax bill this week, and Republicans hope to approve it within days.
Republicans are hopeful they can pass a tax bill by early December, though they have a number of other issues they need to resolve, and face the prospect of losing a Senate seat because of the special election in Alabama.
Senate Majority Leader Mitch McConnell (right) joins Sen. Patrick Toomey (left), R-Pa., and other GOP senators Tuesday in announcing that a provision to end the individual mandate for health care was being added to their tax overhaul plan.
Sen. Tom Cotton (left), R-Ark., and Sen. Roger Wicker, R-Miss., take the elevator Tuesday after the weekly Republican policy luncheon on Capitol Hill. In a statement Tuesday, Cotton expresses satisfaction that a repeal of the individual health care mandate would be part of the Senate GOP tax overhaul plan.