Senators are seriously considering keeping in place some ObamaCare taxes for longer than the House-passed bill would as they seek to draft healthcare legislation that can pass their chamber with a simple majority.
Republicans are looking to slowly phase out extra federal funds for Medicaid expansion, beef up the new tax credits for buying insurance and add money for opioid abuse treatment — but they’ll have to pay for it to ensure the bill passes muster.
That’s because the Senate healthcare bill must save at least as much money as the House’s legislation. Some senators are interested in additions to the healthcare bill that could cost the government, and savings would have to be found elsewhere, perhaps in some of the taxes, Sen. John Thune (S.D.), the chamber’s No. 3 Republican, said.
Sen. Orrin Hatch (R-Utah), who is heavily involved in the healthcare discussions as chairman of the Senate Finance Committee, said that his preference is to repeal all of the taxes but that senators would “look at everything.”
“We’re not going to ignore anything,” he told reporters Tuesday. “We’re going to have to really look very carefully.”
Delaying the repeal or keeping more of the ObamaCare taxes would be the easiest fix, but it risks creating a backlash on the right — and substantial pushback could imperil the bill’s prospects. About 45 conservative groups and activists said in a letter Tuesday that it “would be a mistake” for a Senate bill to not include the tax repeals that were a part of the bill passed by the House last month.
At issue are the numerous taxes that ObamaCare created to help pay for the 2010 health law. Some of the taxes target specific parts of the healthcare industry, while others are paid by high-income individuals. These taxes have long been unpopular with Republicans, and some have also drawn concerns from Democrats.
The House’s bill would repeal nearly all of ObamaCare’s taxes retroactively to the start of 2017. It would wait to repeal the 0.9 percent Medicare surtax on high earners until 2023 and would delay the implementation of the “Cadillac tax” on high-cost health plans until 2026.
The Joint Committee on Taxation estimated that the House bill’s tax provisions would lower revenues by about $660 billion over 10 years.
But there’s a magic number in overall savings the Senate bill must hit: $133 billion.
The Senate bill is likely to be more moderate than the House-passed healthcare bill. The GOP can only afford to lose two votes — assuming Vice President Pence swoops in to break a tie — under the fast-track budget maneuver, known as reconciliation, that Republican senators are using to repeal and replace ObamaCare to avoid a Democratic filibuster.
The Senate bill has to gain the support of its centrist members. And that could cost money.
Moves to build centrist backing include a longer phase-out of the enhanced federal funds for Medicaid expansion. GOP leadership proposed a three-year phase-out, while several moderate members are hoping for a seven-year transition. But some conservatives would like to slow the growth rate of Medicaid spending, and that could help.
Senators are examining adding more money to help curb the opioid epidemic, which could be to the tune of $45 billion over 10 years, Sen. Shelley Moore Capito (R-W.Va.) said.
Additionally, Thune has a proposal to bolster financial assistance for older adults who buy plans in the individual market. The House gave the Senate some extra savings, in theory, to use for this by lowering the threshold for deducting medical expenses.
It’s impossible to know at this stage of the game just how much money each proposal will cost, as senators will have to run the numbers by the nonpartisan Congressional Budget Office. These results will help them know how to tweak the bill to ensure it saves enough money to pass under reconciliation.
“We want to eliminate or phase out all the taxes we can,” Sen. John Hoeven (R-N.D.) said, “but what we can do right now is going to depend right now on the overall package that we create.”
A number of senators said that all options are on the table as they figure out how to pay for their forthcoming proposal.
“I think most of the taxes are going to go away for sure — the taxes that affect consumers, your tax on prescriptions, tax on medical devices, tax on insurance plans,” Thune said. “But our members are still having a conversation about if we want to make changes that are in the end going to require some additional revenue where that might come from.”
It’s an “ObamaCare hangover,” Sen. Mike Rounds (R-S.D.) said.
“You can’t just simply let the American public get hit with these huge price increases without providing those that need it the most some assistance,” he said. “In order to do that, you’ve got to have revenue streams.”
Even conservative Sen. Ted Cruz (R-Texas), when asked if he would be OK with a bill that kept ObamaCare’s taxes longer than the House’s legislation, acknowledged that producing a bill could involve making some tough choices.
“There are many issues being debated in the group,” Cruz said.
“We have a very narrow majority in the Senate, 52 Republicans.”
That doesn’t mean everyone is on board.
A spokesman for conservative Sen. Mike Lee (R-Utah) said that the senator wants “to repeal as many of the taxes as the 2015 repeal bill did as fast as the 2015 repeal did.”
In their letter to Hatch, the conservative groups and activists said that “true repeal of Obamacare means repealing the Obamacare taxes and the Senate should resist the urge to deprive taxpayers of relief in order to pay for higher spending.
“We commend you on your stance to repeal these Obamacare taxes and urge any final package accelerate or at least maintain the House-passed tax reductions.”
Meanwhile, Sen. Bill Cassidy (R-La.) said he doesn’t think healthcare reform is necessarily the right vehicle to eliminate ObamaCare’s taxes.
“If we’re going to repeal the ObamaCare taxes, let’s do it when we do all the other tax stuff,” he said. “Take care of healthcare, figure out who you want to cover and then take the ObamaCare taxes, put it in tax reform and address it all in tax reform.”
(First reported by The Hill) http://thehill.com/policy/healthcare/337689-gop-considers-keeping-obamacare-taxes (June 14, 2017)
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