The $1.5 trillion tax reform bill in the Senate may get a vote this week, possibly Thursday, Politico reports. The bill includes provisions that could affect healthcare, most notably repealing the Affordable Care Act's (ACA) individual mandate that requires nearly all Americans have health insurance.
There are also pieces that could impact capital financing for nonprofit hospitals and a cap on corporate interest deductions, which could hurt for-profit systems with large debt amounts. The bill also includes eliminating the tax deduction allowed for people with high medical costs.
- Sen. Susan Collins (R-Maine), who was a key vote in defeating "repeal and replace" legislation this year, said she could support the tax bill with the individual mandate repeal. However, Congress also must approve her reinsurance bill and cost-sharing reduction (CSR) payments to insurers.
Senate Republicans added the individual mandate repeal to its tax legislation this month as a way to potentially save $338 billion that could offset revenue lost in tax cuts. The downside of the repeal is that an estimated 15 million will lose health insurance over the next decade and premiums would increase by another 20%. Most of the newly uninsured people now have Medicaid or get coverage through the exchanges or individual insurance.
There’s no guarantee that the repeal will remain in the bill. The House tax bill that was approved earlier this month did not include it. President Donald Trump wants the Senate to include the repeal in its legislation, but White House budget director Mick Mulvaney signaled recently that the White House is OK if it is removed from the bill if that results in the bill's passage. If the mandate repeal is not part of the tax bill, the president may still push to weaken enforcement of the mandate.
The Tax Cut Bill is coming along very well, great support. With just a few changes, some mathematical, the middle class and job producers can get even more in actual dollars and savings and the pass through provision becomes simpler and really works well!— Donald J. Trump (@realDonaldTrump) November 27, 2017
Even if the individual mandate is part of an approved Senate bill, there is a chance that the mandate will not remain part of a final law. Since the Senate and House may approve different bills, the two houses will need to work on a final piece in committee merging the two bills. The individual mandate repeal could get removed from the final piece, if it gets that far.
Previously, Collins spoke out about repealing the individual mandate. However, she will support a repeal if the Senate passes Collins’ $4.5 billion reinsurance measure with Democrat Bill Nelson of Florida for states to create reinsurance programs to help payers cover the most costly members in the ACA exchanges.
Collins hopes the reinsurance program, along with CSR payment legislation, will stabilize the ACA exchanges and keep payers from fleeing the market. Those bills may help offset some of the potential ACA market damage caused by removing the individual mandate, but the funding is likely not enough for what payers need to keep the market stable without the mandate. Republicans likely won't support reinsurance and CSR legislation.
Even if Collins supports the bill, Republicans may still not have the votes. With Democrats united against the tax bill, Republicans can only lose two votes. Sens. Ron Johnson of Wisconsin, Steve Daines of Montana, Bob Corker of Tennessee and Jeff Flake of Arizona have all voiced concerns about the bill. Losing three votes would essentially kill the Senate bill.