Senate GOP Tax Plan to Include Repeal of Health Law Individual Mandate -- Update

By Stephanie Armour and Kristina Peterson Features Dow Jones Newswires

Senate Republicans signaled Tuesday they would seek a repeal the Affordable Care Act requirement that most Americans must have insurance coverage as part of their tax-overhaul package, adding an uncertain element to an already complex legislative effort.

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The package is expected to be released later Tuesday. GOP Senate members met to discuss the repeal measure, which President Donald Trump has said should be part of the tax plan.

GOP leaders have been cautious about bogging down the tax bill with controversial health-care provisions, but have been suggesting they could include the repeal because it would generate revenue that could be used to pay for tax cuts elsewhere.

Senate Majority Leader Mitch McConnell (R., Ky.) said it would be part of the tax bill. "The Senate Finance Committee has decided to include that," Mr. McConnell said.

Sen. John Thune (R., S.D.), a member of the Senate Finance Committee, said Republicans intend to use the savings generated by repealing the individual mandate to lower taxes for middle-income households. "It'll be distributed in the form of middle-income tax relief," he said.

Mr. Thune and Sen. Pat Toomey (R., Pa.) pitched the idea of including the measure to Finance Committee members Monday night and again at a luncheon for Republican senators Tuesday, a Senate GOP aide said.

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Mr. Thune said he didn't anticipate that adding the repeal of the individual mandate would prompt many GOP defections from the tax package. Republicans, who hold a 52-48 majority in the Senate, can afford to lose no more than two GOP votes if all Democrats vote against the tax bill as expected. Vice President Mike Pence could break a potential 50-50 tie.

"It's been whipped," Mr. Thune said, referring to the process of rounding up and counting votes.

Mr. Thune also said that as part of the discussions, Senate Republicans were committed to advancing a bill from Sens. Lamar Alexander (R., Tenn.) and Patty Murray (D., Wash.) to extend payments to health-insurance companies for two years after Mr. Trump had earlier cut them off. Those payments are used for subsidies for lower-income consumers.

Ending the mandate, which says that most people who can afford insurance must have it, would lower the federal deficit by $338 billion over the next decade, according to an analysis by the nonpartisan Congressional Budget Office. Eliminating the requirement would increase the number of people without insurance by four million in 2019 and 13 million in 2027, the CBO found, and average premiums for those with coverage would rise by about 10% in most years.

Mr. Trump has pushed GOP lawmakers to repeal the mandate despite pressure from industry and medical groups to preserve it.

On Monday, the president tweeted, "I am proud of the Rep. House & Senate for working so hard on cutting taxes {& reform.} We're getting close! Now, how about ending the unfair & highly unpopular Indiv Mandate in OCare & reducing taxes even further? Cut top rate to 35% w/all of the rest going to middle income cuts?"

A group of industry stakeholders -- including America's Health Insurance Plans, Blue Cross Blue Shield Association, and the American Medical Association -- wrote congressional leaders Tuesday urging them to keep the mandate.

"Eliminating the individual mandate by itself likely will result in a significant increase in premiums, which would in turn substantially increase the number of uninsured Americans," according to the letter.

Democrats, who had been hopeful Republicans would drop the idea of repealing of the mandate following recent Democratic wins in state elections, criticized the revived drive to topple the requirement.

"The tax bill is going to hit the American people with a health care double whammy," said Sen. Ron Wyden (D., Ore.), warning that millions of people would lose their health insurance or pay higher premiums.

Repealing the mandate could cut the deficit because many individuals who get insurance due to the mandate also get government subsidies. If the mandate were repealed and those people didn't obtain coverage, the government would no longer be providing that assistance. Ending the mandate would also reduce the number of people on Medicaid.

Their Republicans' tax package can add no more than $1.5 trillion to the federal deficit over 10 years under Senate procedural rules. Republicans have said repealing the individual mandate would help with their search for revenue to offset the cost of the tax cuts.

Democrats warned that the repeal would lead to a marked increase in premiums for many consumers.

"Golf-course owners, real-estate developers, massage-parlor owners are going to get a break, but on the other hand, we're going to be charging them more for their insurance," said Sen. Claire McCaskill (D., Mo.).

Republicans countered that ending the mandate would provide financial relief from the penalty for many people who can't afford higher premiums.

"Eighty percent of the folks who are paying this tax are folks who live in a household under $50,000," said Tim Scott (R., S.C.) "If we're talking about doing the right thing for the middle class, we're talking about doing the right thing for hardworking Americans, here's a good place to start cutting their taxes."

--Rich Rubin and Louise Radnofsky contributed to this article.

Write to Stephanie Armour at stephanie.armour@wsj.com and Kristina Peterson at kristina.peterson@wsj.com

(END) Dow Jones Newswires

November 14, 2017 16:05 ET (21:05 GMT)