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Senate Republicans Consider Keeping Obamacare Taxes to Pay for Repeal

Majority Leader McConnell wants to end repeal debate before July 4 recess

Senate Republicans might keep some of the taxes imposed by the Patient Protection and Affordable Care Act (PPACA) for a few more years to pay for their own repeal bill, according to Politico. Many of the upper chamber’s GOP lawmakers want to make their repeal plan more generous than the House’s effort, but they’re struggling to find ways to pay for it, the website says. The dilemma is how to balance the expensive effort to drive down premiums with a desire to scrap taxes that would raise money.

Many sticking points remain, according to Senator David Perdue (R-Georgia). “One is how do you pay for all this,” he said, adding a litany of other issues, such as how to cover people with pre-existing conditions, how to reduce premiums, and what to do about the millions who gained coverage through the PPACA.

A tight legislative timeline is adding to the pressure. Majority Leader Mitch McConnell (R-Kentucky) wants to resolve the Senate’s repeal debate by the July 4 recess to ensure that the rest of the year isn’t consumed by health care, senators told Politico. But Budget Committee Chairman Mike Enzi (R-Wyoming), who has started writing the bill, would provide no hard deadlines. 

Republicans have railed against the PPACA’s taxes since the act was signed into law, blaming them for killing jobs and driving up prices, Politico points out. But the party’s orthodoxy on taxes is crashing against its accounting books: keeping the taxes around for even a few years raises money to pay for other parts of the bill.

The House’s repeal legislation would have rolled back almost every PPACA tax retroactively to January 1, 2017.

Republicans are reaching consensus on some parts of the bill, Politico points out. The Senate plan is expected to boost tax subsidies above what the House approved, with an extra bonus for people 50 to 64 years of age, who would have faced huge premium increases under the House bill. Republicans also want to put significant amounts of money into stabilization programs to prop up insurance companies serving PPACA marketplaces. Both of those plans, however, will add substantially to the cost of the Senate GOP’s repeal efforts.

The Senate bill is not expected to include the House’s waivers to allow states to opt out of PPACA safeguards that make insurance companies charge everyone the same price, with few exceptions. The preference of Republican leaders is to allow state waivers for essential health benefits that insurers are now required to offer. 

That isn’t expected to sit well with conservatives looking for as clean a break from the PPACA as possible.

Source: Politico; June 7, 2017.

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