Keep taxes to pay for their repeal

Senate GOP may keep Obamacare taxes to pay for their repeal

By JENNIFER HABERKORN , BURGESS EVERETT and ADAM CANCRYN

Senate Republicans are considering keeping some Obamacare taxes for a few more years to pay for their own repeal bill.

Many want to make their repeal plan more generous than the House’s effort but are struggling to come up with ways to pay for it. The dilemma is how to balance the expensive effort to drive down premiums with a desire to scrap taxes that would raise money.

"There are just two dials here,” Sen. Roy Blunt (R-Mo.) said, referring to tax cuts versus benefits, such as tax subsidies that help people pay for their insurance. “You have to keep turning [them] until you get a majority who says, ‘I like that dial and that dial set right there.’ And that’s a big part of how this has to come together.”

These are among the levers Republicans are trying to calibrate as they draft a bill to repeal and replace Obamacare, a seven-year-old campaign pledge that has stymied the GOP.

Many sticking points remain, said Sen. David Perdue (R-Ga.). “One is how do you pay for all this,” he said, adding a litany of other issues, such as how to cover people with pre-existing conditions, how to reduce premiums and what to do about the millions who gained coverage through the Affordable Care Act's Medicaid expansion.

A tight legislative timeline is adding to the pressure. Majority Leader Mitch McConnell wants to resolve the tumultuous repeal debate by the July 4th recess, to ensure the rest of the year isn’t consumed by health care, senators say.

Republicans still hope to release a draft of their plan by week's end. Budget Committee Chairman Mike Enzi (R-Wyo.), who has started writing the bill, would provide no hard deadlines. But asked if Washington should clear its weekend calendars to read legislative text, he said, “I hope so.”

Repealing Obamacare’s taxes should have been a no-brainer for the GOP. Republicans have railed against the litany of new levies since the Affordable Care Act was signed into law, blaming them for killing jobs and driving up prices. The law imposed new taxes on many health sectors, including medical device makers, insurance companies, high-cost health insurance plans and even tanning salons.

But the party's orthodoxy on taxes is crashing against its accounting books: keeping the taxes around for even a few years raises money to pay for other parts of the bill.

"We haven't settled on anything,” said Sen. John Hoeven (R-N.D.). “Obviously we want to get rid of as many of the Obamacare taxes as we can.”

Keeping some taxes would blunt Democratic criticism that GOP lawmakers are more fixated on cutting taxes than on improving health care. But the approach won't sit well with conservatives, particularly in the House. The House-passed repeal bill would have rolled back almost every Obamacare tax retroactively to Jan. 1, 2017.

Senators said they would likely first build a plan aimed at lowering premium costs and covering more Americans than the House's, and figure out how to pay for it all once the CBO weighs in on how much the effort costs.

“Any suggestion that that’s been figured out is” wrong, said Sen. Tim Scott (R-S.C.), gesturing to the Senate lunch room. “You have to remain open to what it takes to get to 51 votes, and that also requires us to be open to how you pay for it.”

Republicans are reaching consensus on some parts of the bill. The Senate plan is expected to boost tax subsidies above what the House approved, with an extra bonus for people aged 50 to 64, who would have faced huge premium increases under the House bill. Republicans also want to put significant amounts of money into stabilization programs to prop up insurance companies serving Obamacare marketplaces. “Everyone understands that’s got to be a piece of any legislation that comes forward,” said Sen. Bob Corker (R-Tenn.).

Both of those will add substantially to the Senate GOP’s legislative tab.

The House built in some room for the Senate to redesign the tax credits for buying insurance on the individual markets, but the stabilization fund might require a massive reassessment of how soon the Obamacare taxes can be killed.

“I want to get rid of all the taxes, but we have to be realistic in terms of what we can get done and how we can maintain stability in the marketplace for the foreseeable future and until some of the longer-term reforms that we intend to make have had a chance to be put in place,” said Sen. John Thune (R-S.D.).

The Senate bill is not expected to include the House’s waivers to allow states to opt out of Obamacare safeguards that make insurance companies charge everyone the same price, with few exceptions. The preference of Republican leaders and chairmen is to allow state waivers for essential health benefits that insurers are now required to offer.

“That’s a decision that’s going to have to be made, even though that’s added at tremendous cost to the bill. On the other hand, who wouldn’t want to do that if we can?” said Senate Finance Chairman Orrin Hatch (R-Utah). Asked how the Senate can lower costs, he replied: “You’re not going to do it that way.”

The prospect isn't sitting well with conservatives looking for as clean a break from Obamacare as possible.

“All the Republicans are doing is adding some money that causes insurers to stay in the market," said Sen. Rand Paul (R-Ky.), who says the Senate bill so far would keep "90 percent" of Obamacare. "So they're not really fixing the problem. They’re putting a huge, very expensive Band-Aid on the problem, and I’m just not for that."