New GOP Obamacare replacement bill could still face hurdles in Republican-led Senate
A new GOP plan to replace the Affordable Care Act is trying to make some conservative members of the House of Representatives happy — but could be dead on arrival if it goes to the Senate because of concerns about poor people losing insurance.
Four Republican senators on Monday told Senate Majority Leader Mitch McConnell of Kentucky that they will oppose any replacement bill that does not protect people enrolled in Medicaid, the government-run coverage program for the poor.
The four senators, Lisa Murkowski of Alaska, Rob Portman of Ohio, Shelley Moore Capito of West Virginia, and Cory Gardner of Colorado, represent states that expanded Medicaid under Obamacare to cover nearly all poor adults. The GOP has 52 senators, and if three or more of them defect on the party's Obamacare replacement effort, Republicans likely would fail in their bid to get rid of the ACA.
"We will not support a plan that does not include stability for Medicaid expansion populations or flexibility for states," the quartet wrote McConnell, according to a number of news outlets, inlcluding the Washington Post.
The senators' concerns are based on an earlier GOP House draft bill that called for block-granting federal Medicaid aid to states, instead of giving that aid based on the number of people actually enrolled in the program.
It is not clear if a newer GOP bill, due to be unveiled as early as Monday night, would assuage the senators' fears about a loss of coverage or funding for the poor, or merely underscore those fears.
The letter was sent as Politico.com revealed that the current Republican proposal in the House would still give relatively high-income earners at least some assistance buying health insurance, but gets rid of a controversial plan to tax some job-based coverage.
The new proposal also reportedly delays repealing many Obamacare taxes by a year.
The Republican plan calls for issuing tax credits to people who buy individual health insurance plans, as opposed to those who are covered through an employer's plans.
Politico reported that the new proposal would begin phasing out the value of those tax credits at a level of $75,000 for individuals and $150,000 for households.
But they only would be completely eliminated for individuals who earn more than $215,000 annually, and a household that earns more than $290,000.
An earlier GOP plan called for tax credits to be given to anyone who bought individual health plans, but that proposal had drawn howls from more conservative members of Congress who objected to the idea of rich people being given such a benefit.
However, the new proposal still would give some aid to people who would be considered to be making more than a decent income in much of the U.S.
A household earning $290,000 annually is in the 97.7 percentile of earners in the United States, meaning that just 2.3 percent of the households in the country earned more than that in 2016.
An individual earning $215,000 is in the 98.1 percentile of U.S. individual earners.
Politico's article on the new GOP proposal said it completely eliminates a cap on the tax exemption for job-based health coverage.
Most Americans, 170 million or so, get health insurance through an employer. Employers' contribution to the cost of that coverage is not taxed, nor is the value of the coverage to employees. And employees pay their share of the coverage, in the form of premiums, with pretax income.
An earlier GOP proposal would have limited the amount of job-based health insurance that would be exempt from being taxed. That plan had called for taxing employees on the value of coverage that exceeded the 90th percentile of current insurance premiums.
The elimination of that aspect means the GOP, to avoid increasing the federal budget deficit, would have to dig up a new source of revenue to fund the tax credits for the purchase of individual insurance plans.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said that the reported elimination of the limit on tax-exclusion for job-based insurance is "disappointing."
"Limiting the tax exclusion for high-cost health insurance plans both raises replacement revenue and helps control health-care cost growth," MacGuineas said.
"Providing health care coverage in a fiscally responsible manner requires trade-offs and tough choices. We encourage lawmakers to reform the health care exclusion to help control costs and pay for their plan."
Politico also reported that Obamacare taxes, including ones on prescription and over-the-counter drugs, health savings accounts and tanning services would continue until 2018, instead of ending this year, as the earlier GOP plan called for.
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