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Health Care Reform Headaches

Healthcare has been at the top of the agenda for Congress over the past several months. As they prepare to leave for the April break no deal has been reached, but there is talk about returning early from the break to vote on a bill. While reform efforts have created headaches for many in the GOP it is essential they get this done as it will impact their plans for tax policy and infrastructure investments.

The GOP health care bill to repeal and replace Obamacare was pulled from the House floor several weeks ago as it was clear it did not have the votes to pass. There will be recriminations, finger pointing and lots of people will offer opinions about what this means for the future of the legislative agenda in Washington.

House Republicans continue to attempt to reignite their effort to make modifications to the ACA and its taxes this year, but concerns within the GOP persist that the bill does not go far enough while others feel it jeopardizes the health of millions. Some lawmakers say the only path forward for a health care bill is a bipartisan one.

Unclear is the future of the budget reconciliation bill Republicans were going to use to pass the House ACA repeal bill. The reconciliation process allows passage of legislation that affects the federal budget by a simple majority, which Republicans currently hold in the Senate. Perhaps, this can still be a vehicle to repeal the excise tax on medical and dental products or at least provide an avenue for further delay of the tax. Recently, the CBO released its estimates that under the AHCA 14 million fewer people would have health insurance in 2018 than under the current law. This number would rise to 21 million by 2020 and 24 million by 2026.

Also, the CBO estimates that enacting the legislation would reduce federal deficits by $337 billion over the 2017-2026 period. The largest savings would come from reductions in outlays for Medicaid and the elimination of the ACA’s subsidies for non-group health insurance. The biggest costs would come from repealing many of the changes the ACA made to the Internal Revenue Code. These include an increase in the Hospital Insurance payroll tax rate for high-income taxpayers, a surtax on those taxpayers’ net investment income, and annual fees imposed on health insurers—and from the establishment of a new tax credit for health insurance.

CBO also contends the legislation would tend to increase average premiums in the individual insurance market before 2020 and lower average premiums after that. The House bill has changed in recent days, however, so all are awaiting further analysis by the CBO.


By Patrick Cooney, The Federal Group, Inc.
Legislative Representative, Dental Trade Alliance