Republican lawmakers will overturn a key piece of the Affordable Care Act in their tax overhaul, a victory in a long GOP campaign against the health law.
Senate Majority Leader Mitch McConnell said the compromise tax bill from House and Senate negotiators will end the health law's requirement that many individuals buy a minimum amount of health coverage insurance or pay a fine. Doing so could jeopardize the individual major medical insurance market, and the ACA public exchange system, by reducing the number of healthier people who sign up for insurance, insurers and health policy groups say.
The bill will also include a two-year tax break for individuals with high medical expenses, according to two senior congressional aides who described the provision on condition of anonymity. The provision lowers the amount people have to spend on health costs before they can deduct those costs, to 7.5% of their income, from 10% under current law.
The House had proposed eliminating the medical costs deduction, as a way of raising revenue for other tax cuts. Its expansion was pushed for by Senator Susan Collins, the Maine Republican whose vote is crucial to passing the tax package.
McConnell's Statement
H.R. 1, the Tax Cuts and Jobs Act bill. will "repeal Obamacare's individual mandate tax, delivering relief to low-and middle-income Americans who have struggled under an unpopular and unworkable law," McConnell, a Kentucky Republican, said in an emailed statement.
The new tax legislation must still be approved by both houses of Congress. Republicans hold a narrow 52-48 majority in the Senate, which will be further diminished when Alabama Democrat Doug Jones takes his seat.
McConnell said yesterday that Jones will be seated in January.
Sen. John McCain, R-Ariz. (Photo: Senate)
Undoing the ACA individual major medical mandate was one of a handful of specific changes McConnell mentioned in his statement. He also said the bill would lead to "further developing Alaska's oil and gas potential," a likely reference to opening the Arctic National Wildlife Refuge to drilling.
Opening the refuge to the energy industry is an attempt to ensure the compromise bill has enough votes to pass. Alaska Republican Senator Lisa Murkowski has previously opposed efforts to repeal the Affordable Care Act but she's long pushed for Arctic drilling.
More Work Ahead
The status of other health provisions in the compromise bill remains unclear. The House's tax measure ended a tax break for individuals with high medical expenses, while the Senate version made it more generous.
