Trump May Gut Obamacare Through Tax Reform

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Robert Donachie Capitol Hill and Health Care Reporter
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President Donald Trump’s administration is toying with the idea of using tax reform as a tool to gut crucial features of Obamacare, a move that would appeal to Trump’s base but could leave the health insurance marketplace in shambles.

Members of the administration, including Health and Human Services Secretary Tom Price, met Sept. 7 in the Roosevelt Room at The White House to discuss their plans for tax reform, Axios reports. The meeting led to a discussion of repealing Obamacare’s medical device tax, the tax on health insurance plans and the individual mandate.

Republicans tried for the first seven months of Trump’s first year in office to repeal and replace Obamacare, which stalled in the Senate in late July. Senate Majority Leader Mitch McConnell put forth three versions of Obamacare reform, and each fell short of the 50 vote threshold needed under reconciliation rules in a procedural vote.

What is interesting about the Roosevelt Room discussion is that Republicans, in their various attempts to repeal Obamacare, included those measures. For example, the last repeal bill McConnell tried to push through the Senate, known as the “Skinny Repeal,” did away with the individual mandate and delayed the medical device tax till Dec. 31, 2020.

If the administration moved to repeal the individual mandate, it would almost certainly cause premiums to skyrocket and the Obamacare state exchanges massive structural damage. If healthy consumers are not forced to buy into the health insurance marketplace and they therefore opt-out of the market, only the riskiest, sickest consumers are left. To cover the inevitable medical costs that the sickest consumers will accrue, health insurance providers would raise premiums, or stop participating in certain markets altogether.

Although, if the administration tries to do away with the medical device tax, they would likely find support from Democrats, Republicans and the medical industry, which has lobbied against the tax for years.

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