(Bloomberg) — Republican senators said it’s unclear whether their chamber will repeal all of the taxes imposed under the Affordable Care Act as they set aside H.R. 1628, the American Health Care Act health care bill passed by the House, and prepare to write their own from scratch.
“That’s hard to say right now. We just have to see,” said Senate Finance Chairman Orrin Hatch, the Utah Republican whose panel oversees health care and tax policy. “It’s going to be negotiated.”
The uncertainty comes despite what Hatch said on the floor of the Senate in February, when he called repealing the ACA taxes essential, labeling them “harmful to the economy.” Hatch and other GOP senators, including Budget Chairman Mike Enzi, are signaling they’re going to move slowly as they consider the case for and against repealing the health care taxes. Some of the Republican senators say they’re wary of the loss of revenue that would result if the ACA taxes were eliminated, and how that could jeopardize the prospects of helping the uninsured obtain coverage.
“I think we’ll take our time on that one,” said Sen. Mike Rounds of South Dakota.
The House narrowly passed legislation to replace the Affordable Care Act, eliminating taxes that affect insurers, medical device makers as well as individuals earning more than $200,000 a year who face a 3.8% tax on investment income. There’s also a 0.9% Medicare surcharge for top earners. The Congressional Budget Office estimated on March 23 that the revenue lost from repealing the taxes would total $999 billion over a decade.
Senators who are working on crafting a health care bill met Tuesday to discuss the way forward. When asked last week whether the Senate’s working group for health care had brought up the idea of nixing the House health bill’s tax cuts, one of the group’s members, Rob Portman, an Ohio Republican, said “there’s been no discussion of that.”
The No. 2 Senate Republican, John Cornyn of Texas, said he couldn’t yet say whether the party was united in wanting to keep all of the House bill’s tax cuts.
“We’re just at the very early stages,” Cornyn said. “It’s too early to tell you.”
The question of what to do with the ACA taxes is one of many issues looming over Republican senators — along with how to handle the expansion of Medicaid and subsidies for older, sicker Americans.
Sen. Bil Cassidy, R-La. (Photo: Cassidy)
“We’re starting over from a clean sheet of paper here,” said Sen. Bob Corker, a Tennessee Republican. “I don’t think you’re going to see an effort to modify it. It’s an effort to write a new bill.”
Sen. Chuck Grassley, an Iowa Republican and a former chairman of the Finance Committee, said his party members “specifically decided to write a Senate bill, so we don’t have to worry about the House bill at all until we get to conference.”
Corker said it’s important to him that any health care bill the GOP passes is funded, and on a permanent basis.
“I do want to make sure that whatever funding source is there is one that’s sustainable —and doesn’t just end during a budget window — to make things work,” he said.
Sen. Bill Cassidy, a Louisiana Republican, suggested that Congress needs the money from the health care taxes to fund a replacement to meet President Donald Trump’s promises of protecting coverage for Americans.
“If you eliminate pay-fors, you eliminate your ability to fulfill President Trump’s pledge — his contract with the voter,” said Cassidy, a physician. “Keep coverage, caring for those with preexisting conditions without mandate and lowering your premiums.”
Late night talk show host Jimmy Kimmel, who disclosed that his infant son has a severe heart defect and made a plea earlier this month for preexisting condition protection, asked Cassidy during an interview that aired Monday night why lawmakers are giving a tax cut to millionaires like Kimmel. Cassidy’s response: “Tell the American people to call their senators.”
During a Bloomberg interview Monday, Cassidy suggested health care taxes should be part of a tax bill, not a health care overhaul.
“You deal with it all at one time when you do tax reform, not piecemeal,” he said.
— Read 4 ACA Change Paths That Just Got More Popular on ThinkAdvisor.