The legislation that House Republicans have unveiled to repeal and replace ObamaCare would eliminate nearly all of the 2010 health law's taxes — with one key exception.
The House bill, unveiled Monday evening, would allow ObamaCare's "Cadillac" tax on high-cost health plans to take effect in 2025. The tax, which has been opposed by both Democrats and Republicans, had been slated to take effect in 2020 under current law.
By keeping that tax, albeit after a delay, Republicans are trying to ensure that their bill will not add to the deficit after 10 years. That's a key consideration necessary to ensure the measure can pass the Senate with a simple majority, rather than with 60 votes.
Yet the idea could face opposition. Sen. Orrin HatchOrrin HatchOvernight Finance: US preps cases linking North Korea to Fed heist | GOP chair says Dodd-Frank a 2017 priority | Chamber pushes lawmakers on Trump's trade pick | Labor nominee faces Senate US Chamber urges quick vote on USTR nominee Lighthizer Live coverage: Day three of Supreme Court nominee hearing MORE (R-Utah), the chairman of the Senate Finance Committee, has said that all of ObamaCare's taxes "need to go."
“My view is this: After spending seven years talking about the harm being caused by these taxes, it’s difficult to switch gears now and decide that they’re fine so long as they’re being used to pay for our healthcare bill,” Hatch said.
The fate of ObamaCare's taxes has been a source of debate among GOP lawmakers. While many dislike the taxes and want them gone, some lawmakers had suggested keeping them to help pay for an ObamaCare replacement. Aside from the Cadillac tax, the House Ways and Means Committee rejected that approach.
"We dismantle Obamacare’s damaging taxes and mandates so states can deliver quality, affordable options based on what their patient populations need, and workers and families can have the freedom and flexibility to make their own health care choices," House Ways and Means Committee Chairman Kevin BradyKevin BradyTrump, GOP look to tax bill for lifeline The right approach to promoting competition in the health care marketplace GOP rushes to vote without knowing full impact of healthcare plan MORE (R-Texas) said in a statement Monday.
The other ObamaCare taxes would be eliminated starting in 2018, including taxes on medical-device manufacturers, health insurers, pharmaceutical manufacturers, and indoor tanning services. The legislation would also repeal a 3.8-percent tax on net investment income and a 0.9 percent Medicare surtax that apply to high earners.
Two cornerstones of ObamaCare, the individual and employer mandates, would be repealed retroactively. The penalties for not having or providing insurance would be eliminated for 2016 and subsequent years.
The legislation would also repeal ObamaCare's premium tax credits starting in 2020. The bill creates new refundable tax credits for those without employer-sponsored or government health insurance, which is adjusted by age and phases out for individuals making more than $75,000 per year.
In the days leading up to the bill's release, lawmakers had discussed helping to pay for the bill by capping the current tax exclusion on employer-sponsored healthcare. However, that provision not end up in the bill amid concerns from some Republicans.
The House Ways and Means Committee is scheduled to consider the tax portions of the ObamaCare repeal and replace bill on Wednesday.