House Republicans have the basic framework of an Obamacare replacement to show their constituents back home next week, but there’s no mention of the hardest part: How to pay for it.
In a 19-page memo sent to lawmakers Thursday, GOP leaders propose to shift Obamacare’s subsidies from income-based to age-based, gradually phase out Medicaid expansion and reshape its payments and expand the use of tax-free health savings accounts—all while repealing the Affordable Care Act’s taxes.
It gives Republicans, who have faced angry town halls over their plans to repeal the healthcare law, a set of concrete policies during next week’s recess to show they’re serious about replacing the law instead of just stripping people’s coverage away.
But leadership is staying quieter about how to pay for it, working behind the scenes to build consensus around a controversial but lucrative idea: Taxing employer-offered plans above a specified threshold, which could bring in billions of dollars to pay for the health benefits.
While the idea is loved by economists, it’s unpopular among some who view it as upending the system of employer-sponsored coverage through which most Americans get their insurance.
But Republicans say they’re committed to repealing the law’s taxes and won’t create any new ones. So they must turn somewhere to pay for the tax credits and other benefits they want to include.
“I’m not interested in raising taxes anywhere else, so I think unlocking and redesigning the current tax break — I think that’s where we oughta focus our thought,” House Ways and Means Chairman Kevin Brady, whose committee is playing a key role in Obamacare repeal and replace, told reporters.
“I’ll just tell you, I don’t want Americans to suffer under the Obamacare taxes,” Brady said. “I just think they’re bad all around.”
Leadership suggested the idea of capping the employer tax exclusion to a GOP conference meeting Thursday morning. They didn’t specify exactly where the cap would be placed, but members said the idea is quickly rising to the top as the preferred method of paying for an Obamacare replacement.
“It seemed capping the exclusion was the thing presented,” said Rep. Brett Guthrie, R-Ky.
Republican rank-and-file members were hesitant to take a position on a cap. While conservatives are generally more supportive of the idea, it’s still a touchy subject because it is opposed by employer groups who view it as a tax increase.
Guthrie said he still has to “figure out” where he stands on the idea. Other members said they want to see all the details of a replacement plan before they take a position.
“I’m not going to get into any one specific part of the replacement, because it’s just one part,” said Rep. Tom MacArthur, R-N.J. “I’m not sure how it plays with all of the other elements of the reform.”
Rep. Kevin Cramer, R-N.D., said he doesn’t know if he would support capping the exclusion.
“I want to view the whole list [of changes] in context,” Cramer said. “I haven’t studied it enough.”
After Congress returns from its week-long recess, the plan is to start marking up in committee legislation to repeal and replace Obamacare. Both President Trump and House Speaker Paul Ryan said Thursday that process will start in March.
“After Congress returns from the President’s Day recess, we intend to introduce legislation to repeal and replace Obamacare,” Ryan told reporters at his weekly press conference.
