Hill Reaction Mixed to CBO’s Report on GOP’s Health Care Bill

CCH Tax Day Report

A key nonpartisan report on the economic cost of the proposed American Health Care Act (AHCA), the House GOP’s Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) repeal and replace health care legislation, is already generating significant feedback, both positive and negative, from lawmakers from both sides of the aisle on Capitol Hill. The Congressional Budget Office (CBO), together with the staff of with the Joint Committee on Taxation (JCT), released the report on the budgetary effects of the AHCA on March 13 (TAXDAY, 2017/03/14, C.1).

House Republicans are facing what seems to be an uphill battle, particularly in the Senate, of getting the AHCA passed as it is currently written. The CBO’s cost estimate lays the foundation for the negotiations that will likely take place in Republican efforts to ensure the bill’s passage.

Coverage Loss

Some lawmakers are focusing on the CBO’s estimate that 24-million more people would be uninsured in 2026 as compared to current law. Under the GOP plan, “24 million will lose coverage…that’s completely unacceptable,” Rep. Brian Higgins, D-N.Y., wrote on Twitter on March 14. Likewise, Ways and Means Health Subcommittee ranking member Sander Levin, D-Mich, released a statement criticizing the AHCA. “This report demonstrates that 24-million Americans would lose their health coverage by 2026 and the bill would substantially raise insurance premiums for older workers,” Levin said.

The CBO report credits the loss of coverage of the first 14- million people in 2018 specifically to the repeal of the individual mandate and associated penalties requiring that individuals purchase coverage. “Most of that increase would stem from repealing the penalties associated with the individual mandate,” the report states. Additionally, the CBO identifies the proposed changes in Medicaid enrollment as a subsequent source for the further reduction in individuals covered.

Other lawmakers, however, remain adamant that the CBO report does not paint a clear picture of coverage estimates because the AHCA is only part one of three “stages” that the GOP and the Trump administration say will be used to address health care reform. “It’s misleading to only look at one piece of the puzzle. This is not the whole remedy – this is not the whole approach,” Ways and Means Tax Policy Subcommittee Chairman Peter Roskam, R-Ill., said in response to the criticism of AHCA reducing the number of people covered.

Federal Budget

Several Republicans are highlighting the CBO and JCT’s estimate that points to a reduction in the federal deficits of $337 billion over 2017-2026 as the result of the AHCA. According to the report, the largest savings would result from reductions in outlays for Medicaid and from elimination of some ACA tax credits, including the repeal of a tax credit for certain small employers that provide health insurance to employees.” The largest costs would come from repealing many of the changes the ACA made to the Internal Revenue Code—including 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,” the report states.

Next Steps

The House Budget Committee is scheduled to mark up the AHCA bill on March 16, a day later than originally scheduled because of a March 14 snow storm in Washington, D.C.. According to House Speaker Paul Ryan’s, R-Wis., timeline (TAXDAY, 2017/03/10, C.1), the bill should be before the Rules Committee during the week of March 20.

Budget Committee Chair Diane Black, R-Tenn., issued a statement in support of the AHCA after the CBO report was released. “The bill reduces the deficit by $337 billion and lowers taxes by $883 billion for Americans and small business owners” Black said.

Budget Committee Democrats, however, are describing the bill as a tax cut for the wealthy. “In order to give another $600 billion in tax cuts to corporations and the wealthiest among us, Republicans are pursuing a path that will leave 14-million Americans without insurance next year, and result in 24-million people without coverage by 2026,” Budget Committee ranking member John Yarmuth, D-Ky., said in a statement.

President Trump, outspoken in his support of the AHCA (TAXDAY, 2017/03/13, W.1), on the afternoon of March 14 discussed the AHCA and regulatory actions to accompany the bill with Ryan and House Majority Leader Kevin McCarthy, R-Calif., White House Press Secretary Sean Spicer told reporters in a March 14 press briefing. The president and House leaders were to discuss a “series of much-needed regulatory reforms to accompany” the AHCA, Spicer said. No details of the discussion were available at press time.

Additionally, according to Ways and Means’ communications director, Brady met with Senate Republicans on March 14 to discuss the AHCA over lunch. Senate Majority Leader Mitch McConnell, R-Ky., told reporters on March 14 that the bill “will be open to amendment in the Senate.”

By Jessica Jeane, Wolters Kluwer News Staff



All stories by: CCHTaxGroup

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