As GOP mulls next step in ACA repeal effort, Congress targets individual mandate

A new appropriations bill introduced in the House would ban the IRS from enforcing 5000A of the tax code, which requires individuals to maintain minimum essential coverage or pay a tax penalty. (Getty/wingedwolf)

With the fate of the Senate’s healthcare bill still unclear, Republicans in Congress have moved to ensure no matter what happens to the Affordable Care Act, one of its core components—the individual mandate—won’t last long.

On Thursday, a House committee released an appropriations bill (PDF) for 2018 that contains a provision essentially banning the Internal Revenue Service from enforcing section 5000A of the IRS code. That’s the section that requires individuals to maintain minimum essential coverage or pay a tax penalty—a critical incentive to get young, healthy consumers to purchase insurance, albeit an imperfect one.

The bill would also stop the IRS from requiring insurers and employers to report which individuals they cover, another component of enforcing the individual mandate.

“While Congress works to pass President Trump’s healthcare plan, stopping the IRS from implementing the harmful individual mandate helps provide relief for the families suffering under Obamacare,” Garrett Hawkins, a spokesman for Rep. Tom Graves, R-Ga., who chairs the subcommittee that produced the bill, told The New York Times.

The individual mandate has long been controversial, with Republicans arguing it’s a heavy-handed government edict that interferes with the free market. Indeed, some individuals simply opted to pay the tax penalty if they found it cheaper than buying individual insurance. Yet it’s also an essential part of keeping the ACA marketplaces stable, and failing to enforce it could further worsen the individual market’s risk pool.  

The Senate’s ACA repeal and replacement bill, the Better Care Reconciliation Act, attempts to lessen the blow of removing the individual mandate by imposing a six-month waiting period on individuals who apply for insurance after having a sizeable gap in coverage. Yet some are skeptical that such a policy would be very effective at compelling people to stay insured.

Mixed messages from Republicans

In an appearance on “Fox News Sunday,” Marc Short, Trump’s director of legislative affairs, said Republicans are “getting close” to closing a deal to pass the Senate’s healthcare bill.

Yet he also confirmed that the president was willing to revisit the possibility of repealing the ACA then replacing it—an idea that Senate Majority Leader Mitch McConnell has discounted.

“Our preference is to pass the bill the Senate has right now," Short said. "If the replacement part is too difficult for Republicans to get together, then let's go back and take care of the first step of repeal."

Despite objections from congressional leadership, the “repeal-then-replace” route has gained the support of some lawmakers. Sen. Ben Sasse, R-Neb., sent a letter to Trump Friday suggesting the GOP repeal the ACA through reconciliation when it gets back from the July recess, then craft a replacement in August.

And Sen. Rand Paul, R-Ky., who has also backed the idea, said during the “Fox News Sunday” show that repeal-then-replace may be the only option.

"I don't think we're getting anywhere with the bill we have,” he said. “We're at an impasse."