Senate GOP tax bill will include repeal of ObamaCare mandate

Senate Majority Leader Mitch McConnell (R-Ky.) announced Tuesday that the Senate tax bill will include language to repeal ObamaCare’s individual mandate, which could make it tougher for moderate Republicans to support.

Conservatives led by GOP Sens. Ted Cruz (Texas), Rand Paul (Ky.) and Tom Cotton (Ark.) pushed hard to include the provision, which would eliminate the federal penalty on people who do not buy health insurance. President Trump has also pushed for the provision to be part of the tax bill.

McConnell told reporters that adding the individual mandate repeal will make it easier to muster 50 votes to pass the bill.

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“We’re optimistic that inserting the individual mandate repeal would be helpful and that’s obviously the view of the Senate Finance Committee Republicans as well,” McConnell said.

It will raise an estimated $300 billion to $400 billion over the next year that could be used to pay for lowering individual and business tax rates even further.

Sen. John Thune (S.D.), the Senate’s No. 3 Republican, told reporters there has been a whip count and he is confident Republicans can pass a tax bill that includes a measure to repeal the mandate.

Thune said a compromise bill negotiated by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), aimed at stabilizing ObamaCare markets, would be brought up separately. That bill funds key payments to insurers for two years in exchange for more flexibility for states to change ObamaCare rules.

“I’m pleased the Senate Finance Committee has accepted my proposal to repeal the Obamacare individual mandate in the tax legislation,” Cotton said in a statement.

“Repealing the mandate pays for more tax cuts for working families and protects them from being fined by the IRS for not being able to afford insurance that Obamacare made unaffordable in the first place. I urge the House to include the mandate repeal in their tax legislation.”

Senate Minority Leader Charles Schumer (D-N.Y.) blasted the move, saying in a statement, “Republicans just can’t help themselves. They’re so determined to provide tax giveaways to the rich that they’re willing to raise premiums on millions of middle-class Americans and kick 13 million people off their health care.”

Republican members of the Senate Finance Committee had met Monday night to discuss the repeal issue, Republican aides said. The full Senate GOP caucus discussed the idea at its lunch meeting on Tuesday.

Sen. John Kennedy (R-La.) said the bulk of the GOP’s policy luncheon Tuesday was focused on repealing the individual mandate through tax reform. He said the decision wasn’t unanimous, but that no one threatened to vote against tax reform if it were included.

“This is totally different from health care. Nobody was standing up saying, ‘If you do this, I’m not going to vote for the bill.’ There’s none of that. Everybody wants to get to yes,” he said.

Discussions over repealing the individual mandate sparked a tussle in the Finance Committee’s tax-bill markup following Senate lunches on Tuesday. Finance Committee Chairman Orrin Hatch (R-Utah) resumed the markup following lunches by saying he’s “still working to finalize the details of the modification.”

Hatch urged committee members not to ask the expert witnesses about the individual mandate during the markup because it was not in the current version of the bill. He is expected to release modifications later on Tuesday.

“Long story short, no one needs to be talking about the individual mandate at this point,” he said.

Sen. Ron Wyden (Ore.), the top Democrat on the committee, warned that repealing the individual mandate “will cause millions to lose their healthcare and millions more to pay higher premiums.”

Wyden said none of the amendments filed in advance of the markup addressed the individual mandate or health care. He asked that lawmakers have until 5 p.m. on Wednesday to submit additional amendments to address other health issues.

Hatch rejected Wyden’s request, saying that lawmakers can modify existing amendments. Wyden maintained that including individual mandate repeal in the tax bill “redefines the scope of this markup” and appealed Hatch’s ruling that no additional amendments could be filed. But his appeal failed on a party-line vote of 11-14.

Hatch said that about 60 blank amendments had been filed and can be changed as long as they fall into the scope of the bill, which is the Internal Revenue Code.

Thune said that repealing the individual mandate would be germane. 

“My understanding is the individual mandate is a tax collected by the IRS,” he said.

Thune also said the Alexander-Murray bill would be brought up separately, while the bill’s GOP sponsor, Alexander, said that his legislation to temporarily stabilize the ObamaCare insurance marketplace “seems to be an indispensable companion to repeal of the individual mandate.”

Experts have predicted repealing the mandate would undermine the stability of ObamaCare. The Congressional Budget Office (CBO) has said 13 million people would lose health insurance. Alexander added that experts have called the penalty too low to make much of a difference, and the CBO recently revised its estimates of the mandate repeal.

“So I don’t think we know [the impact], but I think it would be a very bad idea to repeal the individual mandate and not pass Alexander-Murray,” Alexander said.

Kennedy said the savings of including the individual mandate repeal in the tax plan could “give relief to those middle and upper middle taxpayers who are not getting as much relief as they should” because of the bill’s elimination of state and local tax deductions.

“Repealing the individual mandate as part of tax reform will provide working families in Louisiana with even more tax relief,” agreed Sen. Bill Cassidy (R-La.). “In 2015, more than 100,000 Louisianans paid a fine for not having health insurance. About 37 percent made less than $25,000 a year, and 78 percent made less than $50,000.”

“Getting rid of Obamacare’s tax on people who choose not to buy a plan or can’t afford the premiums is the right thing to do. It’s also another step toward our promise to improve our health care system. I will continue working with my Finance Committee colleagues to make our tax cut bill even better for working families.”

– Jessie Hellmann and Nathaniel Weixel contributed 

Updated: 3:56 p.m.