After spending nearly a year on a failed effort to repeal Obamacare, Republicans on Capitol Hill are on the verge of repealing the law’s individual mandate as a footnote to their rewrite of the American tax system.
At least two of the three Senate Republicans who blocked the repeal effort over the summer have no problem undoing the requirement that nearly all Americans carry insurance — a provision Democrats say is vital to keep the Affordable Care Act afloat.
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John McCain of Arizona and Lisa Murkowski of Alaska said they support the tax bill, which includes repeal of the individual mandate. Susan Collins of Maine has partially pegged her support to assurances from President Donald Trump and Senate Finance Committee leaders that lawmakers will fund a separate Obamacare program that Republicans say will offset the negative effects of repealing the mandate on premium costs. She has not yet said how she will vote on the tax bill.
But those assurances would require House Republicans to fund the program, called cost-sharing reduction payments, which they deride as a “bailout” of insurance companies. House conservatives have opposed the program although some suggest that if tax reform passage depends on that, they might hold their noses and support it.
“If it was on the precipice of succeeding or failing based on that one issue, there may be people taking a big gulp and moving forward,” said Rep. Mark Walker (R-S.C.), who leads the conservative Republican Study Committee. “But I hope we don’t get to that point.”
Senate leaders on Thursday were hesitant to commit to how the cost-sharing bill, a deal crafted between Republican Sen. Lamar Alexander and Democratic Sen. Patty Murray, might be enacted as lawmakers consider short-term measures to fund the government.
“I would expect to see it before the end of the year,” Senate Majority Whip John Cornyn said.
Alexander said Thursday that the bill, which was written to reduce premiums in 2018 and 2019, may be pushed back one year. Collins also wants to enact legislation she wrote with Sen. Bill Nelson (D-Fla.) that would fund a separate program that would help insurance companies that take on the most expensive patients.
The key GOP motivation for unwinding the mandate — the fine would convert to zero dollars, effectively making it moot — is money. Repeal raises $338 billion to plow into tax reform, according to the Congressional Budget Office. The agency has warned that it is considering revising its estimates downward in the future, making it a depreciating asset the GOP is eager to cash in on now.
The politics of repealing the most unpopular part of the health care law is an added bonus. Initially, Republican leaders were skeptical of combining the tax reform bill with the toxic Obamacare debate. But it quickly became clear that Senate Republicans were on board as long as other parts of the law remained intact.
There is an added sense of schadenfreude for Republicans. In 2012, when a challenge to the mandate went before the Supreme Court in a high-stakes case the GOP hoped would bring down the whole law, Chief Justice John Roberts ruled the mandate was a tax and, therefore, constitutional.
“Justice Roberts told us it was a tax so it belongs in a tax bill,” quipped Rep. Michael Burgess (R-Texas).
The support for repealing the mandate contrasts with the debate over the summer as the Senate took up an Obamacare repeal bill that would have gutted Medicaid. At the time, Murkowski and Collins cited significant worries about reducing access to health care in their states.
But repealing the mandate, Murkowski argued in an opinion piece in the Fairbanks Daily News-Miner earlier this month, wouldn’t hurt access.
“It is important to emphasize that eliminating this tax penalty does not take care away from anyone,” she wrote. “Instead, it provides important relief to those who have been penalized for choosing not to buy unaffordable insurance.”
Insurance companies and many health law supporters strongly disagree. Murray calls the tax bill a “sabotage” of American families’ health care.
The mandate is needed, they say, to make sure that people don’t buy insurance only when they get sick. It was designed to counter the health care law’s requirement that insurance companies accept everyone. Without a mandate, consumers could theoretically buy insurance in the ambulance on their way to the hospital.
For that reason, insurers and health care providers have come out strongly against repealing the mandate.
Still, the impact of the mandate hasn’t been as substantial as the law’s drafters anticipated. The fine isn’t as big as is needed to convince people to buy coverage, some economists say.
“It hasn’t been very effective and doesn’t amount to much. It sounds like more than it is,” said Alexander, chairman of the HELP Committee. “Plus, it is the most unpopular part of the Affordable Care it. So repealing it may not make as much of a difference as people once thought.”
Seung Min Kim contributed to this report.