Lawmakers are engaged in last minute negotiations over healthcare legislation as the Senate barrels toward a vote next week on the enhanced Affordable Care Act (ACA) premium tax credits.
Republicans promised Democrats a vote on the ACA credits by the second week of December as part of the deal to end the government shutdown. If the parties can’t reach a deal on a bipartisan extension, each side may offer its own healthcare bill for dueling votes.
Negotiations remained muddled, with talks happening on several different levels. President Trump has indicated that his administration is continuing to negotiate with Democrats, and several factions of congressional lawmakers have also engaged in cross-party talks. Both Republicans and Democrats are also negotiating within their own parties on the legislation to put up for a Senate vote next week.
The administration teased a sweeping proposal last weekend, only to shelve it before its official release after receiving pushback from Republicans. The plan was reported to include:
- Extending the enhanced ACA credits for two years with income limits while eliminating zero-premium policies
- Allowing premium credits to be diverted to tax-preferred accounts like health savings accounts or flexible spending arrangements.
- Targeting Pharmacy Benefit Managers
- Reforming drug pricing with favored nation rules
The outlook is complicated by internal divisions in both parties. Senate Democrats initially expressed openness to President Trump’s reported proposal, while House Democratic leadership remained committed to a “clean” extension. Republicans are also deeply divided on healthcare, with some supporting a temporary extension of the ACA credits and others vehemently opposed.
Republicans have also discussed pursuing a reconciliation bill to address healthcare next year, but there is little consensus at this point on what it may include.
BDO Takeaway
Any bipartisan legislation on ACA credits or healthcare would be a potential vehicle for other bipartisan tax priorities. Without a deal, there may not be another opportunity to move tax legislation this year. Any healthcare reconciliation bill would also present Republicans opportunities to move other tax proposals.
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