WASHINGTON -- Just before 1 am Wednesday, the Senate approved a massive tax overhaul that includes repeal of the Affordable Care Act's (ACA) individual mandate.
As expected, the bill passed by a straight party line vote (51-48) with no Democrats approving.
"I promised Hoosiers for years and years that I would get rid of the individual mandate. Tonight we'll be fulfilling that promise," said Sen. Todd Young (R-Ind.) late Tuesday evening. Young called the individual mandate penalty "the most oppressive aspect of Obamacare."
The vote did not include Sen. John McCain (R-Ariz.) who has glioblastoma and was hospitalized last week. McCain, one of three Republican senators who had earlier voted against repealing the ACA, returned to Arizona earlier this week to recuperate from treatment and missed the vote.
The Senate's passage of the bill paves the way for the House, which passed the bill on Tuesday afternoon, to re-vote on the bill and approve changes that were made later in the day . Once the House votes again -- which is expected to happen sometime Wednesday -- the bill will advance to President Trump's desk for his signature.
The bill also has several other healthcare provisions, including a change in the medical deduction allowance -- lowering the threshold from 10% of income . In addition, interest on student loans -- including medical school loans -- remains tax-deductible; that deduction was removed in the original House bill.
Both Sides on Display
Senators on each side of the aisle had vastly different views of the bill.
Sen. John Thune (R-S.D.) praised the repeal of the mandate, which requires people to purchase health insurance or pay a penalty. "The individual mandate is a tax on lower-income Americans," he said. With the mandate repeal, "now they won't have to buy health insurance they don't want or can't afford."
Sen. Steve Daines (R-Mont.) agreed. "Frankly, repealing this tax is one of the most compassionate things we could do as part of this legislation," he said, noting that 42% of those paying the penalty -- which he called a "poverty tax" -- make less than $25,000 per year. "Repealing this tax is the right thing to do.
"Contrary to popular belief on the left, no one loses their insurance, but yes they will have the option to do what is in their family's best interest, what is in the individual's best interest," said Sen. Tim Scott (R-S.C.).
But not everyone thinks mandate repeal is a good idea. "This bill is bad for healthcare," said Sen. Brian Schatz (D-Hawaii). Referring to a , he added, "People's premiums are going to skyrocket and 13 million people are going to go without health insurance" by 2027.
"The repeal of the mandate will lead some people to drop out of the ACA-compliant individual market, driving up premiums for the people who remain," David Howard, PhD, of the Department of Health Policy and Management at Emory University, in Atlanta, said in an email.
High-Risk Pools Could Return
“Without the mandate, the issue of only sick people enrolling in the individual market is exacerbated, thus increasing costs/premiums, and making plans less interested in participating,†said Kavita Patel, MD, a resident fellow at the Brookings Institution and an internist at Johns Hopkins Medicine, in an email to ľֱ.
Its repeal forces states to find new ways to deal with high risk patients who need insurance, but don’t qualify for Medicaid. For example, states may look to re-introduce high-risk pools, she said.
“It would have been far better to encourage ways to improve the mandate and encourage younger, healthier people to enroll.â€
With the tax cuts, federal revenues will decline, putting Congress under more pressure to reform Medicare and other entitlement programs, Howard said. And as for the expanded medical expense deduction, "fewer taxpayers will use it, as itemizing becomes less attractive with the [bill's] increase in the standard deduction."
Seizing on a popular cause, Sen. Ron Wyden (D-Ore.) pointed out that the debt incurred by the bill -- approximately $1.5 trillion -- could fund the Children's Health Insurance Program (CHIP) for 915 years. Federal funding for CHIP ran out at the end of September, and Congress has not yet renewed it.
This point was echoed by Sen. Bernie Sanders (I-Vt.), who said, "While we were busy giving tax breaks to billionaires, we have not had time to reauthorize healthcare for children in this country; we should be ashamed of ourselves."
ACA’s History Remembered
Sen. Tom Carper (D-Del.) reminded his colleagues that the ACA, also known as Obamacare, was not invented by President Obama. The ACA's individual mandate, along with its sliding scale tax credits, prohibition against insurers denying coverage to people with pre-existing condition, and establishment of insurance exchanges in 50 states, were Republican ideas, he said. "They happen to be good ideas."
The purpose of the individual mandate, in particular, was to draw younger, healthier individuals to the markets to ensure that older, sicker people weren't the only ones who bought insurance, Carper noted, adding, "If we're going to get rid of [the individual mandate], we need to replace it with something that works at least as effectively."
“Some kind of arm-twisting or strong incentive†is necessary if the ban on insurers denying people with pre-existing conditions remains, Gail Wilensky, PhD, who served as administrator of what is now the Centers for Medicare & Medicaid Services under President George H.W. Bush, told ľֱ.
However, she questions whether the estimate of 13 million more uninsured individuals is accurate.
The main two groups who bought insurance when the ACA passed were those who were heavily subsidized and the “uninsurable†or expensive to insure. “Neither of those groups … seems likely to change their behavior as a result of having the mandate going away,†Wilensky added.
The AARP, which opposes the bill, claimed that its passage is likely to trigger Medicare cuts. "The ... CBO has confirmed that unless Congress takes action, the reconciliation legislation will result in automatic federal funding cuts of $136 billion in fiscal year 2018, $25 billion of which must come from Medicare," Jo Ann Jenkins, the group's CEO, said in a
Republican leadership promised that it will not allow the enactment of a Senate rule, known as PAYGO, which would trigger such cuts.
"This will not happen," Senate Majority Leader Mitch McConnell (R-Ky.) and House Speaker Paul Ryan (R-Wisc.) stated in a on Dec. 1. They pointed to "readily available methods to waive this law, which has never been enforced since its enactment."