Republicans Spar Over ACA Employer Cap, Leaked Repeal Draft

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By Colleen Murphy

Uncertainty remains the name of the game as Republican lawmakers grapple with tax elements of the Affordable Care Act.

A slew of Republicans—including the chairmen and members of the House Freedom Caucus and Republican Study Committee—said Feb. 27 and 28 that they oppose a draft repeal bill that leaked Feb. 24 because it includes a limit on the tax exemption for employer-sponsored health insurance. Some view it as a tax increase, and say keeping certain of the law’s existing tax provisions—all killed in the draft—in place may be a more palatable way to pay for a replacement.

“To me, the big problem with it is you already have the taxes in place to finance the changes you want to make and you’ll be able to repeal some of them probably, or at least lower them,” said Rep. Tom Cole (R-Okla.) Feb. 28, adding he isn’t convinced it would provide enough revenue. “This strikes me as an idea that is well-meant but is politically dangerous and not well-thought through.”

The idea does have some high-profile support. House Ways and Means Chairman Kevin Brady (R-Texas), who is spearheading Republican efforts to dismantle the ACA, has said it is his preferred option to pay for a replacement, though he has acknowledged it is something lawmakers are still discussing. Rep. Devin Nunes (R-Calif.), a member of the committee, told Bloomberg BNA criticism of the cap as a new version of the controversial “Cadillac tax” is a “strange argument to make.”

No Widespread Agreement

The lack of consensus behind the draft, dated Feb. 10, is a signal of the deep friction still surrounding efforts to repeal and replace the law two months into a congressional session in which it is lawmakers’ No. 1 priority. Those efforts could become more complicated in the next few weeks as Republican governors and President Donald Trump have promised to release their own health-care plans.

Still, Republican leaders say they are on track with efforts to introduce a repeal bill using the filibuster-proof reconciliation process and hold a floor vote before the Easter recess in April. House Speaker Paul D. Ryan (R-Wis.) dismissed any controversy over the leaked draft in a Feb. 28 press conference, saying there aren’t rival plans between the House, Senate and White House.

“This is a plan we are all working on together,” he said.

The debate also rages on the other side of the Capitol. Sens. Ted Cruz (R-Texas), Rand Paul (R-Ky.) and Mike Lee (R-Utah) said Feb. 27 they won’t support anything less than the 2015 repeal bill passed by Congress and vetoed by former President Barack Obama. The statements could be an indication that the draft bill wouldn’t be able to pass the Senate, something some Republicans in the House have also suggested.

‘Not Viable.’

Lawmakers have said they are still getting elements of their replacement plan scored by the Congressional Budget Office, and have demurred when asked about specific dates for a markup or bill introduction. The scoring process means Ways and Means staff are making daily updates to the bill, Brady said Feb. 27.

Lawmakers are no longer working off the draft, House Majority Whip Steve Scalise (R-La.) said Feb. 28, calling it “not viable.”

“That draft is not even representative of where we are,” he said, stressing that once the bill is introduced it won’t be set in stone—an indication of disparate views within the party of how to go forward. Members will continue to discuss elements and work with the White House on the plan, he said.

Freedom Caucus Dug In

Rep. Mark Meadows (R-N.C.), chairman of the hard-right House Freedom Caucus, opposes the bill because it includes refundable tax credits, which he said Republicans don’t have the votes to pass. He told reporters after late votes Feb. 27 that House leadership has indicated some small modifications have been made to the draft.

The exemption, which critics say is regressive and inefficient, is capped at the 90th percentile of current premiums in the draft. But over time, that cap could hit at the 60th percentile, considering how insurance premiums fluctuate, Meadows said.

“It certainly will be less than 90 percent,” he said.

Reps. Jim Jordan (R-Ohio) and Dave Brat (R-Va.), also Freedom Caucus members, said Feb. 28 they oppose the draft. The caucus officially said Feb. 15 they won’t support any bill that is weaker than the 2015 version.

More Questions

Some lawmakers are looking to Trump to steer the next wave of action on repealing the ACA. That could bring complications, Rep. Mark Sanford (R-S.C.) said. For example, if Trump backs tax credits for individuals instead of the employer exemption, “It becomes very difficult for Republicans to go a different course.”

Brat said Trump would be “ill-served” to voice support for the leaked draft, and said it’s hard to predict timing of further action because there is no final plan down on paper.

“I think most of the legislative framework will be in place by end of this year,” Cole said. “I think it will come quicker than that but I’m going to give myself some wiggle room—this is Congress.”

With assistance from Laura Davison in Washington.

To contact the reporter on this story: Colleen Murphy in Washington at cmurphy@bna.com

To contact the editor responsible for this story: Meg Shreve at mshreve@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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