Featured Articles

W&M Democrats Criticize GOP Health Bill at Slow-Moving Markup

Posted on March 13, 2017 by STEPHEN K. COOPER ANDDYLAN F. MOROSES

Hours of objections by Democrats, including claims that Republicans rushed the legislative process, were mostly met with silence from GOP members during the March 8 House Ways and Means Committee markup of legislation to repeal and replace the Affordable Care Act.

At press time, the committee had debated only one of five sections in the legislation: a subtitle repealing the deduction limit on remuneration from health insurance providers agreed to under the ACA. The provision was reported to the House Budget Committee on a party-line vote. Subtitles regarding the repeal of consumer taxes, the net investment income tax, the tanning tax, and another that includes the repeal of the ACA premium tax credits and replacement of healthcare tax policy had yet to be considered.

The legislation, the American Health Care Act (AHCA 2017 TNT 43-42: Proposed Legislation), would implement a new tax credit structure and provide incentives for health savings accounts. (Prior coverage 2017 TNT 44-1: News Stories.)

If approved by Ways and Means, the bill will next go to the House Budget Committee to be combined with healthcare bills approved by the House Energy and Commerce Committee. Ways and Means was expected to work into the early hours of March 9.

During his opening remarks 2017 TNT 45-22: Congressional News Releases, Ways and Means Committee Chair Kevin Brady, R-Texas, said that Republicans maintained two of the most popular ACA provisions: keeping children on parents' plans until age 26 and not denying coverage for preexisting conditions, neither of which falls within the committee's jurisdiction.

Before beginning the markup, Ways and Means Tax Policy Subcommittee ranking minority member Lloyd Doggett, D-Texas, attempted to postpone the meeting until March 23, citing a lack of time to review the legislation and the lack of a Congressional Budget Office score, but Republicans tabled his privileged motion on a party-line vote. Doggett proceeded to object to each clause brought up for debate, causing the clerk to read through the legislation line by line.

Ways and Means Committee ranking minority member Richard E. Neal, D-Mass., again recalled the numerous meetings, hearings, and markup hours it took to draft and pass the ACA in 2009. In his opening remarks 2017 TNT 45-23: Congressional News Releases, Neal concluded that the AHCA's "tax giveaway" is "the Republicans' first step at tax reform."

The committee markup was delayed by several floor votes as Democrats attempted to pass a motion to adjourn in the House and delay committee debate on the healthcare law.

Democrat Ron Kind of Wisconsin argued that the remuneration to insurers provision in the AHCA would allow insurance companies to deduct even more compensation than the annual $500,000 allowed under law. Doggett questioned why Republicans included what he described as a $400 million windfall for insurance company executives in the legislation, which he said was part of a "sorry" bill that came before the committee without public hearings. Most Republican lawmakers did not seek time to publicly defend the proposal.

Several Democrats tried to question Joint Committee on Taxation Chief Thomas Barthold on whether there was a distributional analysis for the remuneration to insurers provision, and if those tax changes would benefit middle-income taxpayers. Barthold did not have a distributional analysis available. Rep. John B. Larson, D-Conn., was particularly interested in the distributional analysis, explaining that it would present telling information about which income levels would benefit most from the legislation.

But Rep. Patrick J. Tiberi, R-Ohio, said that Republicans are simply undoing the tax increase on health insurers that Democrats approved when they were in the majority. Kind told Tax Analysts that health insurers agreed to the tax increase during ACA negotiations in exchange for an expanded pool of beneficiaries resulting from changes to Medicare and the new ACA health exchanges. Insurers also agreed to change the medical loss ratio so that they spent no more than 10 percent of premiums on administrative costs, Kind said.

Criticisms of CBO Downplayed

Democrats had criticized the lack of a CBO score before the House markups March 7, with Finance Committee ranking minority member Ron Wyden, D-Ore., speculating that Republicans were "having problems having this math add up." At a press conference that day, Brady and House Energy and Commerce Committee Chair Greg Walden, R-Ore., downplayed the CBO score's absence, and pointed to instances in which CBO forecasts about healthcare policy turned out to be inaccurate. That was the case with the ACA, they said.

House Minority Leader Nancy Pelosi, D-Calif., told reporters Republicans appointed the agency's director and criticized those questioning its work. "They don't know what they're talking about, or they're deliberately misrepresenting the facts," she said about the CBO complaints. "The fact is that when the Affordable Care Act was put forth, we came very close to what the budget office projected would be the number of people covered."

But Ways and Means member Kenny Marchant, R-Texas, told Tax Analysts March 8 that the markup was proceeding without the CBO's verdict because Republicans needed to keep the bill moving forward. GOP critiques of the CBO's healthcare forecasting track record were narrowly tailored to that context and not intended to undermine the scorekeeper's credibility, he said.

Marchant said he didn't think that was Brady and Walden's intention, given the CBO's integral role in the congressional budgeting process and the legislative process generally. "There are pretty profound examples of them missing the mark, in Obamacare," Marchant said of the CBO. "Some of their predictions were pretty far off."

Marchant said he thinks members will have the CBO score, "for sure," before the full House votes on the bill and likely before it reaches the House Rules Committee. "And so there may be a necessity for a manager's amendment that adjusts the bill somewhat" to hit the bill drafters' targets when they do have the score, he added.

Stack of Amendments Denied

President Trump's tax returns were also the subject of committee debate. Doggett offered an amendment to require that Brady use his authority under section 6103 to request that Trump's federal tax returns be made available to Congress before the AHCA takes effect. The amendment followed a House vote a day earlier on a similar resolution by Rep. Anna G. Eshoo, D-Calif. (Related coverage 2017 TNT 45-4: News Stories.)

Democrats also released a letter 2017 TNT 45-26: Congressional Tax Correspondence from the former chief actuary of the Centers for Medicare and Medicaid Services under the Obama administration estimating that repealing the additional 0.9 percent payroll tax on high earners in the ACA would deplete the solvency of the Medicare trust fund in 2025, which is three years earlier than projected under current law.

Rep. Sander M. Levin, D-Mich, charged that Republicans combined a lack of hearings on the AHCA with a markup process that separated legislation into five parts in order to prevent amendments from Democrats from being germane to the legislation.

By a vote of 23 to 16 unless otherwise noted, the committee voted to table the following:

  • An amendment by Democrat Earl Blumenauer of Oregon that would stop the AHCA from taking effect unless the CBO certifies the legislation would result in coverage for all taxpayers and their dependents. The amendment was intended to highlight Trump's healthcare promises.
  • An amendment by Levin to require that a CBO score of the AHCA be made public for at least seven days before a vote on the House floor.
  • An amendment by Joseph Crowley, D-N.Y., to require lawmakers to place a note in the Congressional Record that they read the AHCA and that the bill be accessible on the internet for 72 hours before a House vote.
  • An amendment by Kind to prohibit the bill's effects if the legislation is determined to increase the number of individuals without health insurance or increase the federal budget deficit.
  • An amendment by Neal that would prohibit the legislation from taking effect if the CBO determined that the bill would result in job losses or an "increase in uncompensated care" at local hospitals. "This is going to be a very serious economic drag on all members of this committee if this bill takes effect," Neal said.
  • An amendment by Rep. Brian Higgins, D-N.Y., that would stop the AHCA from taking effect if the CBO determines the bill would increase out-of-pocket costs or reduce the availability of coverage or benefits for Americans aged 55 and older. This amendment failed by a vote of 23 to 15.
  • An amendment by Rep. Mike Thompson, D-Calif., to exempt the state of California and other states from the provisions of the GOP bill. Thompson said the ACA benefits California residents, and moving to the Republican plan would reduce coverage. This amendment failed by a vote of 23 to 15.
  • An amendment by Rep. John Lewis, D-Ga., to stop the AHCA from taking effect until the CBO determines that individuals would not lose coverage and the number of uninsured individuals would not increase. This amendment failed by a vote of 23 to 15.
  • An amendment by Rep. Bill Pascrell Jr., D-N.J. to prevent the AHCA from taking effect if it increases taxes on Americans with incomes below $250,000. This amendment failed by a vote of 22 to 15.
  • An amendment by Rep. Danny K. Davis, D-Ill., to require the legislation to protect health coverage for mental health and addiction treatment services.
  • An amendment by Rep. Linda T. Sanchez, D-Calif., to immediately repeal the Cadillac Tax, a provision that she said has strong opposition from both Democrats and Republicans. The amendment was struck down by Tiberi, even though he acknowledged his opposition to the provision.
  • Another amendment by Pascrell to retain the current deduction limit for health insurers, and direct those "saved" funds towards Medicare programs.
  • An amendment by Rep. Terri Sewell, D-Ala., to ensure the legislation would not result in rural hospital job losses or closures.

In addition to the markups held by the Ways and Means and Energy and Commerce committees, the House Committee on Education and the Workforce held a markup for three bills related to healthcare.

One of them, the Self-Insurance Protection Act (H.R. 1304 2017 TNT 45-20: Proposed Legislation), would amend section 9832(b)(1)(A) . Rep. David P. Roe, R-Tenn., introduced the measure, which according to a committee fact sheet would prevent the redefinition of stop-loss insurance as traditional health insurance. Most employers that self-insure buy stop-loss insurance, a risk management tool for employers to guard against catastrophic claim costs, according to the fact sheet. The Education and the Workforce Committee voted to report the measure to the full House.

Additional document

  • Letter to lawmakers from AARP 2017 TNT 45-25: Congressional Tax Correspondence

David van den Berg and Luca Gattoni-Celli contributed to this report.

Follow Stephen K. Cooper (@ScoopOnTaxes) and Dylan F. Moroses (@DMoroses3244 ) on Twitter for real-time updates.