GOP using tax bill to undercut health law
Individual mandate repeal would free up $300B, but 13M would lose insurance.
WASHINGTON – Senate Republican leaders are adding a provision to their tax bill that would undermine the Affordable Care Act, a major change of strategy as they now try to accomplish two of their top domestic priorities in a single piece of legislation.
Senate Majority Leader Mitch McConnell, R-Ky., said Tuesday that the tax bill will now seek to repeal the Affordable Care Act’s individual mandate, a central piece of the health care law that compels most Americans to buy health insurance or pay a fine.
Repealing the mandate would free up more than $300 billion in government funding over the next decade that Republicans could use to finance their proposed tax cuts, but it would cause 13 million fewer people to have health insurance, according to projections from the nonpartisan Congressional Budget Office.
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 a
WHAT IT MEANS
• Dropping the ACA’s individual mandate would save the federal government $300 billion over a decade, as it would spend less on subsidies.
•The move would lead to 13 million fewer people having health insurance in a decade.
•GOP leaders have different ideas on what they would do with the freed-up money.
massive overhaul of the U.S. tax code. And it scrambles an already complicated calculus as GOP 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.
“We’re optimistic that inserting the individual mandate repeal would be helpful” to the tax effort, McConnell said Tuesday after meeting with party members during a closed-door lunch.
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 had sunk their previous ACA 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 up until Tuesday, Republicans had resisted making the change, worried that injecting health care politics would imperil the tax bill.
The change could unnerve less-conservative Republican senators, who voted against previous Senate efforts to repeal large parts of the ACA.
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.”
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 will allow the GOP to further cut taxes for middleincome families. “It’ll be distributed in the form of middleincome tax relief,” Thune said. “It will give us even more of an opportunity to really distribute the relief to those middleincome cohorts who could really benefit from it.”
The updated tax bill could include provisions of the new bipartisan health care agreement, according to Collins and Sen. Bob Corker, R-Tenn.
Sen. Minority Leader Chuck Schumer said including a repeal of the mandate in the tax bill would torpedo Democratic support for the Murray-Alexander bill. “We don’t need to trade it for a tax bill, and we won’t,” he said.
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 ACA, as they would be full of people with high health care costs but have far fewer of the healthy people insurance companies depend on to stay profitable. In response, insurance companies would likely either massively 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 from both parties arguing that they should retain the 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 revenue, as fewer people with health insurance would mean the government would spend less on insurance subsidies, according to CBO projections. But Republicans gave differing explanations for what they would do with that money.
McConnell said the repeal would allow them to ensure corporate tax cuts remain permanent and also to lower taxes for middle-class families. “It’s pretty appealing to us and it will be in the version that comes out of the finance committee this week,” he said.
Trump 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.
Sen. Rand Paul, R-Ky., said 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.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, gave opening statements at a markup on the tax bill Tuesday.