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Senate to Act This Week on Obamacare Repeal

Republicans expect two-year transition period

The Senate will take its first steps toward repealing the Patient Protection and Affordable Care Act (PPACA) by the end of the week, according to a Reuters report.

Speaking during a January 8 television interview, Republican Senate Majority Leader Mitch McConnell said that “there ought not to be a great gap” between repealing the act and replacing it and that Republicans would be “replacing it rapidly after repealing it.” He did not define what he meant by “rapidly.”

House Majority Whip Steve Scalise cited a previously proposed Republican bill to repeal the PPACA that laid out a two-year transition period for putting an alternative in place. “That’s a benchmark for what we’re looking at again,” he said.

Repealing the act without an immediate replacement raises questions about what happens to those who obtained insurance under the PPACA.

President Obama stated in an interview that while the act could theoretically be repealed, “suddenly 20 million people or more don’t have health insurance.”

“I think Republicans now are recognizing that may not be what the American people, including even Trump voters, are looking for,” he added.

The PPACA came under renewed criticism recently after the government disclosed that benchmark 2017 premiums would jump 25% compared with 2016. Several large health insurers have withdrawn from the market, saying they were losing money.

Obama said he expected the PPACA to survive, albeit in a modified form.

In related news, BloombergPolitics has reported that congressional Republicans are divided on whether to scrap the PPACA’s tax provisions when the act is repealed or to delay that move until a replacement is ready.

Some Republicans have announced that parts of the PPACA must go immediately––including its tax-revenue streams––because that’s what voters were promised, according to Bloomberg. But repealing the tax increases, which pay for the subsidies needed to help millions of Americans afford coverage, could make it politically impossible to pay for a replacement plan down the line.

Republican Senator Bill Cassidy of Louisiana said that if lawmakers start by repealing all of the PPACA taxes, “then you’re in a hole” when it comes to replacing the act later with an alternative that covers more people, costs less, and doesn’t add to the deficit. Most Republicans in Congress have signed pledges not to raise taxes, making raising enough revenue for a stand-alone replacement plan politically challenging.

An analysis by the Committee for a Responsible Federal Budget put the loss of revenue from repealing PPACA’s taxes at $800 billion over 10 years. It said that approximately half of that would come from removing the 0.9% Medicare payroll surtax on wages above $200,000 ($150 billion) and the 3.8% surtax on investment income above the same threshold ($250 billion). Another quarter of the revenue loss would result from repealing various fees on insurance companies, medical-device companies, and drug manufacturers.

Sources: Reuters; January 8, 2017; and BloombergPolitics; January 6, 2017.

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