Tax reform or health care reform? Senators to include repeal of key Obamacare mandate in tax bill

As if passing a tax reform bill wasn't hard enough.

Sen. Ron Wyden, D-Ore., center, the top Democrat on the Senate Finance Committee, criticizes the Republican tax reform plan while Chairman Orrin Hatch, R-Utah, left, and GOP members, top, listen to his opening statement as the panel begins work overhauling the nation's tax code, on Capitol Hill in Washington, Monday, Nov. 13, 2017. (AP Photo/J. Scott Applewhite)
Sen. Ron Wyden, D-Ore., center, the top Democrat on the Senate Finance Committee, criticizes the Republican tax reform plan while Chairman Orrin Hatch, R-Utah, left, and GOP members, top, listen to his opening statement as the panel begins work overhauling the nation's tax code, on Capitol Hill in Washington, Monday, Nov. 13, 2017. (AP Photo/J. Scott Applewhite)

Sen. John Thune (R-SD) told reporters Tuesday that Senators will try to repeal a key component of the Affordable Care Act (ACA), with some members looking to the tax reform bill as a vehicle. The move to repeal the individual mandate as part of the Senate legislation is projected to result in 13 million uninsured, according to the Congressional Budget Office (CBO). It’s also a critical provision for keeping the ACA marketplace stable.

The Senate Finance Committee — which is overseeing the tax bill — decided to repeal the mandate in their tax package during a closed-door party lunch on Tuesday, according to Politico. The move would save the government $338 billion over the next decade, which would, in turn, help pay for tax reform.

Sen. Ron Wyden (D-OR) failed to block the move during a Senate Finance Committee hearing Tuesday evening. He tried to argue that repealing the mandate went against budget rules, but his attempt was voted down.

The individual mandate may be the most unpopular ACA provision, as it requires everyone to have ACA-compliant insurance or pay a tax penalty. However onerous, the mandate is integral to the marketplace. Some Republicans recognize this, as they voted down legislation that repealed the ACA in the past.

During a memorable 2 a.m. vote in July, Sens. Susan Collins (R-ME), Lisa Murkowski (R-AK), and John McCain (R-AZ) voted against a bill that temporary repealed the individual mandate. Sen. McCain voted against the so-called skinny repeal bill because of the irregular process; Majority Leader Senator Mitch McConnell (R-KY) had released text to the Health Care Freedom Act (HCFA) just hours before the vote.

So far, these members will not commit to voting against a tax reform bill that includes repealing the individual mandate, according to one Bloomberg reporter:

What does repealing the individual mandate mean for your health care? A host of health care experts — from insurance companies to hospitals — wrote a joint letter to Congressional leaders urging them to maintain the individual mandate unless they come up with a comparable provision to encourage people to sign up for insurance.

“Under current law, the individual mandate is one of the primary incentives for individuals to enroll in coverage,” wrote the letter’s authors. “Eliminating the individual mandate by itself will result in a significant increase in premiums, which would in turn substantially increase the number of uninsured Americans.”

Kaiser Family Foundation’s Larry Levitt —  a leading voice on current health care law — echoed this sentiment tweeting: “repealing the ACA’s individual mandate doesn’t sound like something that could be bad for anyone. But it’s the mechanism that allows guaranteed coverage for pre-existing conditions.”

The way the ACA marketplace — which provides insurance to nearly 20 million people — is set up requires people to be incentivized to buy coverage, or it just does not work. There’s precedent for this that predates current health law.

Washington state tried to revolutionize its health care system in the 1990s. The idea was that residents could get access to quality, affordable health care plans, but in order for it to work, everyone needed to purchase insurance. After two years, the state legislator repealed the provision that required people to enroll. Premiums rose, enrollment dropped, and insurers fled.

“The individual mandate has a bad reputation among people who don’t like government telling us what we can and cannot do,” Aaron Katz, a University of Washington health policy professor who witnessed his state’s death spiral in the 90’s, told ThinkProgress earlier this summer during health care reform. “But this is an idea [from the] 1980s by Republicans.”

Katz added that he was frustrated that Washington, D.C. is not looking to Washington state for evidence. Although not identical to present day law, there are parallels worth noting.

Activists went all out to try to kill any bill that undermined access to affordable, quality coverage. Already, consumer activists are sounding the alarm online:

“I don’t think they are listening,” Senator Patty Murray (D-WA) said in a conference call with reporters when asked if GOP members are hearing constituents call to maintain current health law.