Saturday, March 11, 2017

Republicans Start Process To Repeal Obamacare

The House Ways and Means and Energy and Commerce committees March 9 approved legislation that would replace the Affordable Care Act and repeal many of its taxes. Lawmakers in the Senate and House expect more changes to be made to legislation
The American Health Care Act, approved on Republican-only yes votes, has nevertheless drawn significant criticism from a number of Republicans on both sides of Capitol Hill as well as those on the Democratic side of the aisle. Republican protests center on the creation of advanceable, refundable tax credits to buy health insurance, the failure to fully repeal all of the ACA's taxes and the failure to insure that those who currently qualify for Medicaid will continue to receive coverage.
Ways and Means approved its language in a 23-16 vote along party lines, rejecting Democratic calls to postpone the markup. Energy and Commerce then cleared its health care bill by a vote of 31-23 after a 27-hour session that saw tempers flare as Democrats on that panel tried to delay the legislation.
The House Budget Committee will blend the two committee bills, and that legislation will go through the Rules Committee process before heading to the House floor for a vote. If the measure clears the House, it will move to the Senate for approval.
Repealing the tax provisions funding the Affordable Care Act will cost the government at least $593.7 billion over the next decade, according to the Joint Committee on Taxation. That figure does not include the revenue loss from several provisions, including funds tied to repealing the individual and employer mandates to buy health coverage. Those revenue scores will come from the Congressional Budget Office, which has not yet released those numbers or the cost of the House Republican plan to replace the health care law.
The repeal of the most of the tax provisions in the ACA will not have any impact on this filing season but is certain to alter the filing process in future years, if enacted. A summary of the tax provisions proposed to be repealed, together with links to the Joint Tax Committee document describing the provision.
Summary of Tax Provisions Repealed in Health Care Bill
Net investment income tax: 3.8 percent tax on investments for high-earning taxpayers
$157.6 billion
Fee on health insurance providers: Annual fee for entities providing coverage
$144.7 billion
Wouldn't apply starting in 2017
Medicare tax increase: Tax of 0.9 percent on earned income greater than $200,000 for individuals/$250,000 for a couple
$117.3 billion
Was set to begin in 2018, repealed
"Cadillac tax": Surcharge on high-cost health plans
$48.7 billion
Repealed for 2016 through Jan. 1, 2025 (applies for taxable periods after Dec. 31, 2024)
Higher medical expense deduction threshold: 10 percent threshold for elderly taxpayers and for alternative minimum tax purposes
$34.9 billion
Lowers floor to 7.5 percent in 2017 for elderly taxpayers, 2018 for AMT filers.
Annual fee on branded prescriptions: Applies to manufacturers and importers
$24.8 billion
Dec. 31, 2017
Medical device tax: 2.3 percent excise tax on manufacturers and importers
$19.6 billion
Dec. 31, 2017
Limitation on health flexible spending arrangements: Applies to cafeteria plans
$18.6 billion
Dec. 31, 2017
Tax increase on health savings accounts: Maximum contribution limit to HSA increased to amount of deductible and out-of-pocket limitation
$18.6 billion
Repeal effective on distributions after Dec. 31, 2017
Over-the-counter medication exclusion: Nonprescribed over-the-counter medicines not permitted as medical expenses for HSAs
$5.5 billion
Dec. 31, 2017
Tanning tax: 10 percent tax on retail tanning services
$600 million
Deduction for high-paid employees: $500,000 cap on wage deduction for health insurance executives
$400 million
Dec. 31, 2017

A table providing the estimated revenue effects of all of the tax provisions considered and approved by the Ways and Means Committee is available in another Joint Committee on Taxation document, JCX-16-17.

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