For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...
Changes to the House GOP health care bill will set aside about $85 billion for the Senate to boost tax credits for older individuals, which amounts to an additional $2,000 per individual, lawmakers said.
That pot of funding was included in a manager’s amendment to the House bill released late March 20, three days before House leaders hope to bring the measure to a floor vote. It is expected to target individuals ages 50 to 64, whose premiums increase greatly under the House bill. That age bracket currently would receive a tax credit of $4,000.
The size and scope of the tax credits—which are adjusted by age and capped at certain income levels—has been one of the sticking points for many lawmakers since the bill was released March 6. The fact that the amendment now puts the impetus on the Senate all but guarantees the chamber will make changes to the bill that require it to be sent back to the House for another vote—and potentially opens the door to more contentious negotiations down the road.
“The Senate will have to work through about how best to give that group of people additional support, and so if we tried to figure that out today, all that, it would be another two weeks before we could get the bill out,” Rep. Vern Buchanan (R-Fla.), a member of the House Ways and Means Committee, told Bloomberg BNA.
The amendment doesn’t spell out how much the Senate must allocate to those 50 to 64 years old, giving the Senate leeway to shape it. Individuals ages 50 to 59 received $3,500 and those older than 60 received $4,000 under the original bill. The credit is refundable and is designed to help individuals who aren’t eligible to receive coverage through work.
The amendment also reduces a deduction threshold to 5.8 percent of income for the cost of medical expenses, instead of the current 10 percent, according to a committee statement.The repeal date on the Affordable Care Act’s tax provisions is moved up in the amendment, killing them off retroactively in 2017 instead of starting in 2018. That adjustment was a concession to the hard-right members of the conference, Rep. Tom Reed (R-N.Y.) told Bloomberg BNA. Some members of the House Freedom Caucus called the bill “Obamacare Lite” for not ditching the taxes immediately.
“I think some folks on the right were concerned, ‘Why would we keep these taxes in place when we have an opportunity to repeal them outright?’” Reed said. “I can hear that, that makes some logical sense, so moving it there, I think moved it that way.”
Moving up the repeal date is “critical for the economy,” Ways and Means Committee Chairman Kevin Brady (R-Texas) told reporters.
“Clearly these taxes, they aren’t making health care more affordable. They’re actually driving down the economy,” he said.
The derided “Cadillac tax” would return in 2026 instead of 2025 under the amendment. The tax, which has been criticized from both sides, is a 40 percent tax on parts of high-cost employer health plans.
A new Congressional Budget Office score is expected by March 22, a House GOP aide said. That score, which will show the cost of the bill and the number of individuals who would lose coverage, could be a key signal for members still on the fence.
President Donald Trump met March 21 with members of the Republican Conference to urge them to support the bill. House leaders still haven’t hit the 216 votes they need to pass the bill, and some members of the Freedom Caucus are dug in against it.
“I’m sure it’s close, that’s why he’s here,” Rep. Tom Rice (R-S.C.) said of the whip count for the bill. He added that he expects there to be a conference committee between the House and the Senate.
“The Senate is obviously not going to take everything we’ve said word for word,” Rice said.
The House Rules Committee is slated to consider the bill and the manager’s amendment March 22.
Senate Majority Leader Mitch McConnell (R-Ky.) downplayed House debate over the bill, calling it “a full display of the legislative process.”
McConnell said senators will be able to modify the bill when it reaches the chamber, but remained committed to holding a vote on it the week of March 27, assuming it passes the House.
“We will reach a conclusion on health care next week,” he said, saying that because the House plans to pass it using the filibuster-proof reconciliation process, it must move quickly once it reaches the chamber.
Sen. Ted Cruz (R-Texas) said he is “working night and day” with House members, senators and the White House to “negotiate a resolution that enables us to honor our promise and repeal Obamacare.”
“I want to get to yes. I believe we will get to yes. But it’s not enough to just pass a bill whose title is Obamacare repeal. We have to solve the problem that Obamacare caused, which is making health insurance unaffordable for hard-working Americans. I believe we can solve that, and we will, but the House bill doesn’t get it done,” he said.
Some members of the Senate said March 21 that they hadn’t yet closely studied the manager’s amendment, and others said they don’t think the chamber should rush to a vote.
“I hear a lot of people saying we need to do something. I’m a guy who feels we need to do the right thing—I don’t mind waiting,” said Sen. John Boozman (R-Ark.). “I’m OK with taking as long as we need to get it right.”
Sen. Bill Cassidy (R-La.)—who is working on a tax credit amendment with Sen. John Thune (R-S.D.)—said he needs more time to consider the House bill, and said House Republicans should want more information on the structure of the tax credit before voting.
“I don’t know how that helps, I just don’t know,” he told reporters. “Is it a Band-Aid or does it really accomplish something?”
With assistance from Kaustuv Basu, Laura Davison, Alex Ruoff and Jonathan Nicholson in Washington.
To contact the reporter on this story: Colleen Murphy in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Meg Shreve at email@example.com
Text of the House manager's amendment is at http://src.bna.com/m91.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)