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Hatch Says It’s Unclear if All ACA Taxes Will Be Repealed

Posted on May 9, 2017 by Dylan F. Moroses, Asha Glover

A top Senate Republican acknowledged May 8 that it was unclear whether all taxes imposed under the Affordable Care Act would be repealed during healthcare reform, while Senate Democrats urged their Republican counterparts to abandon the latest House bill and take a more inclusive approach on reform.

Senate Finance Committee Chair Orrin G. Hatch, R-Utah, told reporters the possible repeal of ACA taxes is “going to be negotiated. We’ll just have to wait and see.” A Senate aide said Hatch will be responsible for writing a large part of the Senate’s legislation.

Senate Finance Committee member Pat Roberts, R-Kan., told Tax Analysts that he believed the revenue piece of the American Health Care Act (AHCA, H.R. 1628) that would repeal much of the taxes associated with the ACA is something “that most Republicans will support.”

The AHCA, which passed the House May 4 on a 217-213 vote, would retroactively eliminate many of the ACA’s tax provisions to the beginning of 2017, including the 3.8 percent net investment income tax and the medical device excise tax. The measure would eliminate the tax on tanning salons, reduce the income threshold for the medical expense deduction, and delay implementation of the “Cadillac” tax on high-cost healthcare plans for one year, until 2026. It also would provide a new refundable tax credit for the purchase of health insurance and would expand the use of health savings accounts.

Senate Majority Leader Mitch McConnell, R-Ky., thanked his House counterparts for passage of the AHCA during his opening remarks on the Senate floor, but acknowledged there would be obstacles ahead for the bill. “Now the Senate will do its work. . . . This process will not not be quick or simple or easy, but it must be done. It’s the least members in both parties owe to the countless Americans who continue to suffer under Obamacare, and the countless more who will be hurt if we don’t.”

Senate Majority Whip John Cornyn, R-Texas., who is a part of a healthcare working group of Senate lawmakers, said that he believed healthcare would dominate Senate discussions in the coming days. “My sense is we’re going to be talking about healthcare virtually every day, all day long until we get it done,” adding, “we’re doing this in our conference, we meet three times a week with our full conference. Sen. McConnell’s made it clear that he wants to dedicate that time to discussing healthcare.” Cornyn didn’t say what changes the Senate is considering making to the House bill.

Roberts said that no formal meetings of the working group have been scheduled. He also said he would make rural healthcare a priority in negotiations on changes to the AHCA, working with committee colleague John Thune, R-S.D. , on the issue. He added that he is aware the current legislation would fail to qualify for a simple majority vote under budget reconciliation rules.

Senate Health, Education, Labor and Pensions (HELP) Committee Chair Lamar Alexander, R-Tenn., indicated that the Senate would craft their own legislation in a more deliberate fashion, but was unclear whether his panel would hold further hearings on healthcare reform, telling reporters “we have already had hearings on healthcare.”

Sen. Ted Cruz, R-Texas, told reporters he expected the legislation to come straight to the floor, rather than go through the committee process, but stressed that Republicans would “not set artificial deadlines” to “get this right.” Cruz is part of the Senate Republican working group on healthcare reform.

Senate HELP Committee ranking minority member Patty Murray, D-Wash., and Senate Finance Committee ranking minority member Ron Wyden, D-Ore., wrote to the chairs of the committees, urging them to “hold hearings on the devastating impacts of Trumpcare.”

“Furthermore, we urge you to abandon the disastrous Trumpcare bill, stop trying to repeal the [ACA] and sabotaging the healthcare system, and work with Democrats on bipartisan legislation to make healthcare more affordable, expand coverage, and strengthen quality of care for patients and families,” Murray and Wyden wrote to Alexander and Hatch.

Wyden later told reporters that Republicans have made clear their healthcare reform exercise is “purely partisan.”

Follow Dylan F. Moroses (@DMoroses3244) and Asha Glover (@AshaSGlover) on Twitter for real-time updates.