Reinsurance, individual mandate repeal and more: 3 things to know about the healthcare provisions in the Senate tax plan

Leo Vartorella -

The proposed Republican tax bill not only seeks to overhaul the tax code, but also includes measures that will have a significant effect on healthcare.

GOP leaders in the Senate cannot lose more than two Republican votes to pass the bill if all Democrats vote against it. Sens. Bob Corker, R-Tenn., and Ron Johnson, R-Wis., voiced opposition to the plan but voted Tuesday to pass it through the Senate Budget Committee, according to Politico. Though Sen. Susan Collins, R-Maine, was initially hesitant to approve the proposal, she said new healthcare provisions added to the bill led her to support the legislation, according to Politico.

Here are the three things to know about the healthcare implications of the new tax proposal.

1. The bill includes a repeal of the individual mandate to have health insurance. However, to earn the support of Ms. Collins, lawmakers agreed to adopt cost-sharing subsidy and reinsurance proposals that will hopefully mitigate the mandate repeal's impact on premiums, according to Politico.

Ms. Collins said she and President agreed legislators would consider the additional healthcare bills and sign them into law before the House and Senate finish negotiating the final tax bill, according to Bloomberg.

2. President Donald Trump will support the bipartisan Alexander-Murray market stabilization bill, according to Bloomberg. Though he previously said he could never stand behind the bill because it funds cost-sharing reduction subsidies, he backed the bill during a GOP lunch Tuesday and confirmed his new stance during a later meeting with Ms. Collins. The bill would also give states flexibility regarding certain ACA regulations.

Senate Majority Leader Mitch McConnell, R-Ky., previously said he would not bring the Alexander-Murray bill to a vote until he had President Trump's approval.

3. In her meeting with President Trump, Ms. Collins also said she was able to secure his support for a reinsurance bill she introduced in September with Sen. Bill Nelson, R-Fla., according to Bloomberg.

The bill would provide between $3 billion and $5 billion annually for states to establish reinsurance funds that would reimburse insurers 80 percent for claims ranging from $50,000 to $500,000 from 2018 to 2020, and 80 percent for claims ranging from $100,000 to $500,000 starting in 2021, according to the Bangor Daily News.

Critics of the mandate repeal have said repealing the individual mandate will turn insurance marketplaces into high-risk pools with skyrocketing premiums, but Ms. Collins hopes the reinsurance funding will cover high-cost patients and help keep premiums down.

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