It's time for Republican senators to act on Obamacare repeal by taking up the House-passed American Health Care Act.
Passing healthcare reform legislation (whether in the form of repeal only, or repeal with elements of conservative reforms) is far better than the status quo and represents an incremental movement in the right direction. Failing to act, by opposing efforts to begin consideration of the AHCA, will mean that Obamacare remains law and will empower Senate Democrats to push healthcare reform based around bigger government, more spending, and higher taxes.
The vehicle that is being used to repeal Obamacare, known as budget reconciliation, is inherently limited (because lawmakers cannot repeal many regulations through the process) and volatile (because they can offer unlimited amendments that have a budgetary effect).
These two factors mean that whatever legislation comes out of the Senate will not be perfect. As a result, some Senators are blocking the attempt to even begin the process of passing healthcare reform.
While there remains some disagreements on the best policies to pursue, Republicans need to recognize that this is just the first step. Congress and the administration will have other opportunities to implement healthcare reforms – first through Health and Human Services Secretary Tom Price's administrative authority.
Even though the outcome will not be perfect, it is an opportunity for progress on a number of core conservative issues including lower taxes, lower spending, expanding HSAs, reforming and preserving Medicaid, and expanding state flexibility over healthcare.
To start, this healthcare legislation means dramatic tax reduction for American families and small businesses. The trillion dollars in higher taxes have resulted in higher healthcare costs and fewer choices.
Obamacare imposed a $2,000 tax penalty on a family of four that failed to purchase government-approved health insurance, and another $2,000 penalty on businesses for every employee they failed to provide with government-approved insurance. Removing these penalties is a huge win, as is repeal of the Obamacare tax increase on families with high medical bills.
Prior to passage of the law, a family could deduct medical costs once they exceeded 7.5 percent of adjusted income. Obamacare increased that to 10 percent of income, an income tax increase that hits families making an average of $53,000 a year.
There are also numerous taxes on the healthcare industry that increase costs and reduce access to care. For instance, the Obamacare health insurance tax increases premiums by $5,000 over a decade, with half of the tax falling on families earning less than $50,000 per year.
In addition to repealing many taxes, lawmakers can repeal many restrictions on tax-preferred Health Savings Accounts, which are used by 20 million Americans, including the medicine cabinet tax, which prevents HSA users from purchasing over-the counter medications with their accounts.
One proposal that lawmakers will vote on doubles the contribution limit on HSAs, and allows these accounts to be used to pay for premiums. Under these reforms, HSAs become a legitimate tool for millions more Americans to fund healthcare costs.
Moving forward on the healthcare bill is also an opportunity to achieve bold entitlement reform that will help stabilize the nation's faltering fiscal state. The Obamacare Medicaid expansion has resulted in soaring costs and poor healthcare costs. Lawmakers can finally repeal this program, but they can also go further by block granting all Medicaid spending to the states, a long-time conservative goal.
The reforms in the Better Care Reconciliation Act -- one version of healthcare reform that Senators are considering -- implement a traditional block grant or a more targeted per-capita allotment.
This will stabilize Medicaid spending by tying the growth of the program to inflation so that it does not grow faster than the economy. Medicaid will still continue to grow, with federal spending on the program projected to increase by billions over the next decade.
After seven years of opposing Obamacare, lawmakers finally have a chance to end the law's system of top-down command and control. While it is unlikely that this legislation will achieve everything that Republicans have proposed, the effort to reform healthcare will not end with this bill.
By voting to take up the House-passed AHCA later this week, senators have an opportunity to cut taxes on the middle class and rein in out of control spending through bold entitlement reform.
But if lawmakers oppose the effort to even begin consideration of this bill, they will lose the chance to reform the nation's healthcare system for the foreseeable future, and perhaps forever.
Alexander Hendrie is a contributor to the Washington Examiner's Beltway Confidential blog. He is tax policy director at Americans for Tax Reform.
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