The House of Representatives and the Senate are vigorously working to pass a tax reform package before the end of the year.  Both the House and Senate passed their budget resolutions with reconciliation instructions by Thanksgiving, a necessary step in order to craft their respective tax reform packages.

The entire House passed their tax reform proposal on November 16, just before the Thanksgiving break.  The Senate Finance Committee passed their tax proposal later that evening by a vote of 14 to 12 along party lines.  This week, we will see if the Senate can get the tax reform package passed.

There are major differences between the House and Senate tax bills but of great importance to those of us who care about healthcare reform and ridding ourselves of the Patient Protection and Affordable Care Act (ACA), or Obamacare, the Senate bill contains an important provision the House bill does not.  The Senate bill repeals the individual mandate that forces all Americans to purchase health insurance.  It does so by reducing the penalty for not purchasing health insurance to $0.

The Congressional Budget Office (CBO) released its score of the Senate tax package yesterday.  Here is what the CBO says about the repealing the individual mandate:

The Affordable Care Act (ACA) includes a provision, generally called the individual mandate, that requires most U.S. citizens and noncitizens who lawfully reside in the country to have health insurance meeting specified standards and that imposes penalties on those without an exemption who do not comply. In response to interest from Members of Congress, CBO and the staff of the Joint Committee on Taxation (JCT) have updated their estimate of the effects of repealing that mandate. As part of repealing the mandate, the policy analyzed would eliminate the penalty that people who have no health insurance and who are not exempt from the mandate must pay under current law…

CBO and JCT estimate that repealing that mandate starting in 2019 – and making no other changes to current law – would have the following effects:

• Federal budget deficits would be reduced by about $338 billion between 2018 and 2027.
• The number of people with health insurance would decrease by 4 million in 2019 and 13 million in 2027.

It is good to see that the CBO has finally admitted one of the major reasons why the number of people with health insurance would decrease if the mandate was repealed is because they would no longer be forced to purchase a product they do not want.  According to a January 11, 2017, Daily Signal, the I.R.S. reported about 6.5 million Americans paid an average penalty of $470, totaling about $3 billion, for not having health insurance in 2015.  In reality, the mandate has been an abject failure.  Obamacare enrollment has never been much above 10 million.

On Tuesday, November 28, the Senate Budget Committee will convene to consider the Senate tax reform package and make any small changes that are needed to bring it into compliance with reconciliation rules and then take it to the floor.  Under reconciliation, it only takes a simple majority to pass a bill, not the usual 60 votes that is required to avoid a filibuster.  It is unlikely any Democratic Senators will vote for the package, but many Republicans are not quite on board either.  Some want more tax cuts, others are concerned about whether the economic growth promised by the tax cuts will be enough to lower the debt.  Others have expressed concern with repealing the individual mandate.  However, every Senator will be given the opportunity to amend the legislation during the floor debate.

Let’s hope repealing the Obamacare mandate survives the Senate legislative process and makes it through the conference committee, where the House and Senate will work out their differences within their respective bills.