Senate Republicans reworking Obamacare are considering taxing employer-sponsored health insurance plans, a move that would meet stiff resistance but which would help make the tax preferences for health insurance more equal. The move could raise billions in revenue that could be used to help stabilize the fragile individual insurance market. But it could be politically risky, since it could expand the impact of GOP health proposals from Medicaid recipients and those who buy insurance on their own to the roughly 177 million people who get coverage through their employers.
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Democrats in California’s state Senate spent Thursday hemming and hawing over Senate Bill 562, the Healthy California Act. The legislation would create a single-payer health care system to cover all Golden State residents. This proposal would kneecap California’s economy and saddle millions with the life-threatening wait times, rationed care, and out-of-control costs that plague all single-payer systems. The Healthy California Program would cover all medical expenses without premiums, deductibles, or copays. Such a sweeping overhaul won’t come cheap. An analysis from the state Senate Appropriations Committee puts the cost of the plan as originally proposed at around $400 billion a year.
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The Kaiser Family Foundation asked Americans about replacing the Affordable Care Act, and 55 percent of those surveyed want the Senate to reject a bill that passed the House unless the Senate makes major changes. Joe Antos says, “Not only do Democratic respondents think that the things that are going wrong are really on President Trump’s watch and he’s responsible but most Republicans believe that, too.”
The Trump administration is apparently preparing to overhaul Obamacare’s birth control mandate, purportedly allowing any employer to seek a moral or religious exemption from the requirement, according to a draft regulation obtained by Vox. The ACA requires nearly all employers to offer health insurance that covers access to a wide array of contraceptive methods—a mandate that has faced numerous court challenges. The draft proposal, if finalized, would significantly broaden the type of companies and organizations that can request an exemption.
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The CBO has refused to adjust its computations to the ever-more-apparent failings of the Affordable Care Act. When the CBO says that 23 million fewer people will have insurance coverage under the AHCA than under the ACA—a statistic that politics have converted into a mantra—that figure is predicated on fictional ACA participation. The CBO assumes 18 million people will be enrolled in ACA exchanges in 2018 and that enrollment will continue to grow until 2026. No one on any side of the political spectrum believes this to be true.
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Senate leadership staff will huddle this week with their colleagues on three key committees to begin drafting the chamber’s legislation to repeal and replace the 2010 health care law. “The drafting process is going to get underway,” said John Thune of South Dakota, the third-ranking Senate Republican. “Now we have enough direction, we’ve had enough meetings, we’ve got enough input from our members to know sort of what the main issues are, and kind of where the moving points are and how we can dial things. We’ll start putting stuff together and get it out there and let people react to it.”
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If the Senate were simply to remove the House bill’s uniform tax credit and continue the hybrid model past 2019 through 2020 and beyond, the bill would most likely get a better coverage score from the CBO. The Senate would be able to direct more financial assistance to those who need it, whether because of old age, ill health, or low income. Indeed, the Senate could tweak the exact formulas for age and income adjustment to maximize the number of people with health insurance in the most cost-effective way.
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For Majority Leader Mitch McConnell, writing a Republican-only health care bill that can pass the Senate boils down to this question: How do you solve a problem like Dean, Lisa, Patrick, Ted, Rand and Susan?
Those are some GOP senators whose clashing demands McConnell, R-Ky., must resolve. Facing solid Democratic opposition to demolishing former President Barack Obama’s 2010 overhaul, Republicans will lose if just three of their 52 senators defect.
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The Trump budget assumes Obamacare repeal. On the tax side of this, it particularly assumes repeal of the 3.8% point surtax on capital gains, dividends, and other savings (known as the “net investment income tax,” or NIIT). There are approximately 20 other new or higher taxes in Obamacare that also will be repealed. Tax reform assumes they are gone before starting on a new system.
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As House Republicans passed legislation toppling large portions of the ACA, groups representing hospitals, doctors, consumers and some insurers made no secret of their displeasure. Now, in the Senate, which hopes to complete its own version of a health overhaul by August, Republicans are unambiguous about their intention to draft an entirely new bill in a more deliberate manner with input from outside groups. Sen. Orrin Hatch of Utah, the Senate Finance chairman whose committee is responsible for drafting much of the legislation, has specifically asked for suggestions from industry associations.
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