Senate GOP Plans to Repeal Obamacare Mandate in Tax Bill

Senate GOP Plans to Repeal Obamacare Mandate in Tax Bill
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Senate Republicans plan to add a repeal of Obamacare’s individual insurance mandate in their tax legislation this week, adding a controversial debate about health care to their effort to overhaul the tax code before the end of this year.

President Trump and conservatives in both chambers of Congress have urged GOP leaders to add a mandate repeal to the tax bill, though some Republicans have expressed concern that it could further complicate the already difficult process of passing an overhaul of Internal Revenue code. Still, Republican senators discussed the issue during their weekly policy lunch Tuesday and determined the majority of them want to include a repeal.

“We’re optimistic that inserting the individual mandate repeal would be helpful,” Majority Leader Mitch McConnell told reporters following the lunch.

Sen. John Thune, a member of party leadership, said he is confident a bill that includes the repeal could pass on the Senate floor. He said the revenue saved by eliminating the mandate would allow for further adjustment of tax rates, thereby increasing the measure’s benefits for middle-class earners.

The Congressional Budget Office estimated last week that repealing the individual mandate would reduce budget deficits by $338 billion over a decade. That gives Republicans more flexibility as they try to craft their legislation to fit Senate parliamentary rules requiring that it not add more than $1.5 trillion to the deficit over the next decade, and that it not add any more outside of the first decade.

The CBO analysis predicted that mandate repeal would result in 4 million fewer people having health insurance in 2018, and as many as 13 million fewer having insurance in 2027. It also forecast that premiums in the individual marketplace would rise as fewer people purchased insurance.

Democrats sharply criticized Republicans for inserting health care into the tax legislation.

“Rather than learning the lessons from their failure to repeal health care, Republicans are doubling down on the same partisan strategy that would throw our health care system into chaos,” Minority Leader Chuck Schumer said. “If the American people weren’t already outraged by this bill, injecting health care into it will certainly do the trick.”

Sens. Susan Collins and Lisa Murkowski expressed some concern about including a repeal in the tax measure, suggesting that it added new complications to the process. Both senators voted against the Senate’s Obamacare repeal legislation earlier this year, but neither said whether they would vote for or against a tax bill repealing the individual mandate.

Tax reform is complicated enough, and when you add health care reform in at the same time it continues to complicate it,” Murkowski told reporters Tuesday.

Sen. John Cornyn, the second-ranking GOP senator, said there is some concern about the effect repealing the mandate could have on the health care marketplace. A potential option would be to push a bipartisan stabilization package -- similar to what Sens. Lamar Alexander and Patty Murray negotiated earlier this year -- that could "mitigate" the problems with the marketplace, Cornyn said.

Sen. Thom Tillis added that a bipartisan health care bill would be a necessary second step to repealing the mandate. "It doesn’t make sense in isolation," he said. 

But Schumer threw cold water on the idea of Democrats negotiating off a GOP repeal of the individual mandate, saying that the health care compromise should pass as part negotiations over the year-end spending bill. 

"We don't need to trade it for a tax bill, and we won't," Schumer said. 

Sen. John McCain, who also voted against Obamacare repeal earlier this year, said he wants to see the full tax bill before making any decisions.

Still, the vast majority of GOP senators appeared receptive to the idea. Tennessee’s Bob Corker said he approves of repealing the mandate, and hoped it would be used to prevent the legislation from adding to the deficit.

“If you get rid of the mandate, all you’re saying to many Americans, a lot of whom are poor, is that the federal government is no longer going to tax you for not buying health insurance that you can’t afford,” said Louisiana Sen. John Kennedy.

The Senate Finance Committee debated the legislation during markup sessions Monday and Tuesday, but that version did not yet include the repeal. A new version from Chairman Orrin Hatch is expected to be released later Tuesday that would include the mandate provision. It’s likely to clear the committee by the end of this week.

House Republicans are voting on their bill Thursday, and are extremely unlikely to add individual mandate repeal before then, given their confidence in being able to pass their legislation as it currently stands. 

"There are a lot of our members that would like to do it, but there’s some that don’t want to conflate health care and taxes," said Rep. Tom Cole. "I think probably the attitude here is let’s see what the Senate does."

James Arkin is a congressional reporter for RealClearPolitics. He can be reached at Follow him on Twitter @JamesArkin.

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