Tax Bill Will Eliminate Individual Mandate…But Was the Trade Worth It?




Senate Majority Leader Mitch McConnell came back from a meeting with top Republicans on Tuesday to announce that the Senate version of the tax reform bill will indeed include a clause to eliminate the Obamacare individual mandate, an announcement that should come as welcome news to conservatives who had hoped for such an accomplishment. McConnell said he hoped that including the language would get Republicans to the 50 votes needed to pass the bill.

“We’re optimistic that inserting the individual mandate repeal would be helpful, and that’s obviously the view of the Senate Finance Committee Republicans as well,” he told reporters.

The new language is there as a result of intense pressure from conservatives like Rand Paul and Ted Cruz, to say nothing of encouragement straight from the White House. Eliminating the mandate not only gets the GOP a step closer to their goal of repealing Obamacare, it will raise some $400 billion in revenue that can help Republicans lower taxes even further than they were originally going to be able to do in their revenue-neutral bill.

“I’m pleased the Senate Finance Committee has accepted my proposal to repeal the Obamacare individual mandate in the tax legislation,” said Sen. Tom Cotton. “Repealing the mandate pays for more tax cuts for working families and protects them from being fined by the IRS for not being able to afford insurance that Obamacare made unaffordable in the first place. I urge the House to include the mandate repeal in their tax legislation.”

So…what’s the catch?

Well, for one thing, repealing the individual mandate could push moderate Republicans off the other side of the board, setting up another one of those “meet me in the middle” impossibilities that turned the healthcare bill(s) into such a fiasco. We heartily await to hear from senators like Susan Collins of Maine and, perhaps, John McCain, who seem to wait anxiously for these moments where they can prove to the Democrats that they aren’t like all the rest of those damn dirty Republicans. If they haven’t turned their backs on this legislation by the end of the weekend, count us surprised.

Two, repealing the individual mandate with tax reform apparently comes with the stipulation that Obamacare “stability” legislation – the brainchild of Sens. Lamar Alexander and Patty Murray – will come to the floor for a vote. Without some major rollbacks of the regulations that have sent healthcare premiums skyrocketing over the past couple of years, eliminating the mandate – the only thing keeping many insurance patients in the marketplace – will inevitably cause those premiums to rise again. How much? Impossible to say. Some conservatives say the effect of the mandate has been overstated – but even if it has, it is undoubtedly having some effect. Without it, insurance companies will hike rates in accordance with the worst case scenario…even if said scenario never comes to pass.

The stability legislation purports to put a hold on that trouble by “bailing out” the insurance companies for a couple of years – long enough, hopefully, for Republicans to finally make good on their repeal/replace promise. But this is exactly what President Trump vowed not to do, and it represents yet another flagrant federal intervention into the private insurance market. If the GOP wants to put us on the path to socialist-style single payer healthcare, this would be a fine first step.

Republicans are desperate to pass tax reform, knowing that they cannot endure the political fallout from another massive failure. But in their desperation, they must be careful not to pass legislation that will ultimately come back to bite them – and us – over the next few years.

 


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