Trump backs healthcare tax credit amid conservative opposition

Trump backs healthcare tax credit amid conservative opposition
© Victoria Sarno Jordan

President Trump on Tuesday endorsed putting tax credits in an ObamaCare replacement plan, an idea opposed by many conservatives.

Trump laid out five broad “principles” for overhauling the healthcare system during his address to Congress Tuesday night. In those principals, he endorsed the creation of tax credits to help people pay for health insurance.

The leaders of the conservative Republican Study Committee and House Freedom Caucus on Monday said they would oppose a draft GOP plan because it included tax credits, calling the idea a new entitlement program.

Tax credits are a central element of House Republican leadership’s plan, though, as the main way to help people afford insurance. Trump’s remarks could give that idea a crucial boost, at a time when GOP fractures on the healthcare law are deepening.

“We should help Americans purchase their own coverage, through the use of tax credits and expanded health savings accounts — but it must be the plan they want, not the plan forced on them by the government," Trump said.

"In his address, President Trump embraced a health care replacement plan that, among other important reforms, includes a tax credit to help individuals buy a health plan that fits their needs," Ryan spokeswoman AshLee Strong wrote in an email. "These comments demonstrate that the White House and Congress are coalescing around a particular approach that will help us keep our promise to the American people to repeal this broken law and replace it with a better system."

“I thought it was a home run," Ryan told CNN's Jeff Zeleny following Trump's speech.

"We’re all working on the same page and I thought he did a fantastic job. He articulated exactly the response that we’re working on that we all believe is necessary to repeal and replace ObamaCare with a much better system." 

To be sure, Trump did not specify that the tax credit would be advanceable and refundable, which are the characteristics that have drawn conservative opposition. A refundable credit means low-income people can get money back from the government regardless of whether they owe income taxes.
More broadly, Trump called again for repealing and replacing the Affordable Care Act.
“Mandating every American to buy government-approved health insurance was never the right solution for America,” he said. “The way to make health insurance available to everyone is to lower the cost of health insurance, and that is what we will do.”
While Trump has previously expressed hesitation about the political risk of repealing ObamaCare, Trump spoke more forcefully on Tuesday.
“Action is not a choice, it is a necessity,” he said.
Trump also called for protecting people with pre-existing conditions, without offering details on how, and to provide a “stable transition” currently enrolled in ObamaCare.
He also called for state flexibility and allowing insurance to be purchased across state lines, something that is already allowed under ObamaCare.
Trump did not mention ObamaCare’s expansion of Medicaid. That's one of the thorniest issues for Republicans, given that some in the party are wary of repealing the expansion and taking coverage away from constituents.