13 03 2017

House Tax Committee Votes To Repeal Obamacare

Further progress towards the repeal of Obamacare and its replacement with a Republican alternative was taken on the evening of March 9, with the House of Representatives House Ways and Means Committee approving the proposed new legislation.

By approving the text of the American Health Care Act, the Ways and Means Committee voted to repeal the majority of the tax provisions included in the Obamacare legislation, notably the Medicare surtax and net investment tax on incomes above certain thresholds, the individual and employer mandates, and the premium tax credit, which is intended to help those on low and middle incomes to buy approved health insurance schemes.

The Republican plan would replace the premium tax credits with a refundable tax credit of between USD2,000 and USD14,000 depending on family size and income, aimed at taxpayers who don't receive insurance through work or a government program.

The proposed legislation would also broaden the scope of tax-advantaged Health Savings Accounts by almost doubling contribution limits and giving taxpayers more choice on how they spend money accumulated in their accounts.

The House Ways and Means Committee has jurisdiction over federal revenues measures, and therefore its approval of the proposals is a key step towards the repeal and replacement of Obamacare. Following approval of new legislative proposals by the Energy and Commerce Committee - which also has jurisdiction over key elements of Obamacare - on the same day, the measures move to the House Budget Committee to be considered as one bill. The bill will then be sent to the Rules Committee - also known as the Speaker's Committee - before moving to the House floor for a final vote.