Senate Republicans' Tax Bill Includes An Obamacare Individual Mandate Repeal

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Progressives called the Republican tax breaks regressive and bad for the average American, but the GOP upped the ante on Tuesday when Senate Finance Committee Chairman Orrin Hatch included an amendment to repeal the Obamacare individual mandate through the tax bill. That could potentially undermine the health care law, given that insurance companies claim that without the mandate they cannot afford to include other popular stipulations of the Affordable Care Act, like coverage for pre-existing conditions.

Hatch explained in a statement that "scrapping this unpopular tax from an unworkable law" would ease financial burdens imposed by the mandate (those who don't buy health insurance are penalized). He also said it would "generate additional revenue to provide more tax relief to these individuals."

This may seem confusing, but it's technically true. The move would remove the tax that people pay for not having insurance, but it would also increase money for the government. Cutting taxes doesn't usually gain the government money, but in this case it could. That's because fewer people would buy subsidized Obamacare insurance plans to fulfill the mandate, and those subsidies come out of the federal budget.

That's not to say it's the best option for Americans or the country, though. The savings would mostly not go to lower- and middle-class Americans, but rather to the corporate tax cuts and other savings for top income earners. It would be a change in the redistribution of wealth to benefit the wealthy, taking from subsidized insurance for the poor and using that money to lower tax brackets for the rich.

In addition, everyone who decides to be insured would likely pay higher premiums. Healthy and young people currently bring down prices because they're required to sign up. The Congressional Budget Office estimated back in July that a "skinny repeal," which repealed the individual mandate, would raise premiums by 20 percent next year alone.

Despite these arguments in its favor, the individual mandate is the most unpopular portion of the Obamacare bill. Politifact has explored the different ways that polling on this portion of the bill has been carried out, and it has relative unfavorable ratings compared to the rest of the bill. That said, when polls are worded to reflect the Trump administration's efforts to undermine Obamacare, support for the mandate rises substantially.

Experts in the health care field, unlike the general public, are not split; they're highly supportive of the mandate. Insurance companies, doctors, and hospitals are all in favor of keeping the mandate. In response to the individual mandate's cut being included in the tax bill, major industry groups wrote in a letter to Congress about its potential ramifications. "Eliminating the individual mandate by itself likely will result in a significant increase in premiums, which would in turn substantially increase the number of uninsured Americans," the groups wrote in a letter this week.

But Hatch seems to have support of his fellow Republicans. According to Politico, the proposal was discussed at a meeting on Tuesday and not one GOP senator spoke out against the proposal. On Monday, President Trump tweeted that cutting the individual mandate was the way to go.

This move, though, could put the GOP's tax bill in jeopardy of stalling in the Senate. Republicans' push to repeal the health care law has endured many failures in 2017, whereas tax cuts appeal to the GOPs' corporate donors and voter base that opposes government spending.

On the other hand, the inclusion of the individual mandate savings could allow Mitch McConnell to use "budget reconciliation." If the bill doesn't increase the federal deficit by more than $1.5 trillion over the next 10 years, then a simple majority would be needed to pass the bill using this method, as opposed to 60 votes with normal procedure.

Which road the GOP ultimately decides to go down on could shape the way the tax bill fight plays out in Congress.