Provision ending individual mandate could make its passage difficult
will add a partial Obamacare repeal to their tax plan, using the revenues gained to further lower tax rates.
WASHINGTON — Senate Republicans took a big gamble Tuesday with their tax reform bill, adding a partial Affordable Care Act repeal provision that will free up more money for tax cuts, but also inject significant new political hurdles.
The change, backed by President Donald Trump and a handful of senators, would end the mandate under the Affordable Care Act — also known as Obamacare — that all Americans have health coverage. Senate GOP leaders had previously rejected the idea as too risky to include in their tax package, particularly after the repeated failed efforts earlier this year to repeal the ACA.
Repealing the mandate would save the government an estimated $338 billion over 10 years, but only because millions of people would stop buying insurance and therefore would no longer receive subsidies.
Looking for way to fund their ambitious tax plan and under fire for giving most of the breaks to corporations and the wealthy, Senate Republicans made a lastminute decision to insert the Obamacare repeal. They plan to use the savings to pay for additional tax cuts for middle- and upper-class Americans.
“It’ll be distributed in the form of middle income tax relief,” said Sen. John Thune of South Dakota, the third-ranking Republican.
It remains to be seen whether Senate leaders can muster the 50 votes needed from their own party to pass the new version, though they expressed confidence. “We’re optimistic that inserting the individual mandate repeal would be helpful,” Senate Majority Leader Mitch McConnell, R-Ky., said.
As a possible concession to lure centrist Republicans who sank previous efforts to repeal the health care law, Senate leaders indicated they would move ahead with a bipartisan health care compromise bill worked out by by Sen. Lamar Alexander, R-Tenn., and Sen. Patty Murray, DWash., that is intended to stabilize the health care markets. “We’re committed to moving Alexander-Murray,” Thune said.
But by inserting health care into the tax debate, Republicans risked reactivating opposition from the coalition of health care groups that helped quash their earlier repeal efforts.
On Tuesday, 16 leading consumer and patient groups together expressed alarm at the proposal. “Repealing the individual mandate without otherwise increasing access to adequate, affordable health insurance is a step backwards for individuals and families” noted the groups, which include the American Heart Association, the American Lung Association, the March of Dimes, Consumers Union and the advocacy arm of the American Cancer Society.
Democrats called it a desperate move that would result in 13 million additional uninsured Americans and premium hikes of 10 percent, according to nonpartisan analyses of the impact of ending the mandate.
“Republicans just can’t help themselves,” said Senate Minority Leader Chuck Schumer, D-N.Y. “If the American people weren’t already outraged by this (tax) bill, injecting health care into it will certainly do the trick.”
The House tax bill, which is expected to pass later this week, does not include the Obamacare provision. Conservatives pushed to add it to House legislation.
Senate Republicans have been frantically searching for ways to make their bill more attractive to middleclass taxpayers, while still adding no more to the federal deficit than the $1.5 trillion allowed under their budget instructions.
The tax bill lowers tax rates for many individuals, but also does away with popular deductions, such as the ability to write off state income and property taxes, widely used in New York and other high-tax states.
House Republicans ended up retaining property tax deductions up to $10,000 after lawmakers from New York and New Jersey objected.
Some key GOP senators also voiced concerns that their plan did not do enough to help the middle class. “Middle income taxpayers are going to be really hurt by repeal of the SALT,” said Sen. Susan Collins, RMaine, using the acronym for state and local tax deductions.
A somewhat similar idea, the so-called skinny Obamacare repeal, failed to garner enough Republican support in the Senate last July when Collins joined Sens. John McCain of Arizona and Lisa Murkowski of Alaska to vote no.
Sen. John Thune, R-S.D., said a bill to stabilize insurance markets will move forward.