Senate plans amendment to gut ACA in tax bill, testing GOP unity
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 the tax bill will now seek to repeal of the 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 massive overhaul of the U.S. tax code. And 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.
"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 Trump pressed Congress to include the repeal in their tax efforts in a Twitter post Nov. 1, but it was received cooly by GOP leaders who feared the same health care politics that had sunk their previous Affordable Care Act repeal attempts would torpedo their tax effort.
A senior House GOP leadership aide tells NBC News the House does NOT plan to include the individual mandate repeal in the House tax plan being voted on Thursday.— Alex Moe (@AlexNBCNews) November 14, 2017
President 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.
Repealing the mandate would free up more than $300 billion in government funding over the next decade, but it would cause 13 million fewer people to have health insurance in a decade, according to projections from the nonpartisan Congressional Budget Office.
To be perfectly clear: The @SenateMajLdr is admitting to a room full of CEOs that in order to make their corporate tax cuts permanent, Senate Republicans will gladly take health care away from 13 million people. https://t.co/t3ObKLPxUp— Senator Bob Casey (@SenBobCasey) November 14, 2017
The change could unnerve less conservative Republican senators, who voted against previous Senate efforts to repeal large parts of the Affordable Care Act, also known as Obamacare.
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 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."
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 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 insurances markets set up by the Affordable Care Act, as 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 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 individual mandate.
The @GOPSenFinance #TaxReform bill will help PA families in 2 big ways: 1. We lower your federal tax bill. More money for you, less for Uncle Sam. 2. We take arguably the worst business tax code, and make it the best, driving up wages. Learn more: https://t.co/6wgQGi8kff— Senator Pat Toomey (@SenToomey) November 14, 2017
"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, as fewer people with health insurance would mean the government would spend less on insurance subsidies, according to CBO projections. But Republicans appeared to give differing explanations for what they would do with that money.
McConnell, speaking later 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.
"It's pretty appealing to us and it will be in the version that comes out of the finance committee this week," McConnell 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 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 tax bills in the House and Senate would lower taxes for many Americans, but nonpartisan analysts have concluded millions would pay higher taxes, particularly if they lived in states such as New York, New Jersey, and California.
Those analyses have also concluded 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 defection of three 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 only need 50 votes — plus, if necessary, a tie-breaking vote from Vice President Mike Pence — to pass the bill.
I've traveled across America this year on @POTUS ' behalf, and every place I visit, working families and job creators tell me the tax code is an enormous burden to their success and growth. #WSJCEOCouncil pic.twitter.com/ySPcOlwVs5— Vice President Mike Pence (@VP) November 14, 2017
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. They are hoping to vote on their version of the measure as soon as Thursday.
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.
The Senate Finance Committee is debating their version of the tax bill this week, and Republicans hope to approve it within days. The House version, which as of now does not include mandate repeal, is expected to be voted on by the full chamber as early as Thursday.
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.