Last week, Senate Republicans introduced the Better Care Reconciliation Act of 2017, which would make a number of changes to the U.S. healthcare system and the federal taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. code. Like the House healthcare bill, the Senate bill would repeal several provisions from the Affordable Care Act, including nearly all of the tax increases passed in that bill.
This afternoon, the Congressional Budget Office released a score for the Senate bill, which included revenue estimates. Overall, the Senate bill would reduce federal revenue by $701.0 billion between 2017 and 2026. Of that total, $550.1 billion of the revenue loss comes from the repeal (or delay) of 13 taxes in the Affordable Care Act, which are listed below:
| Provision repealed (or delayed) | Effective date of repeal (or delay) | Change in federal revenue, billions of dollars, 2017-2026 |
|---|---|---|
| Source: Congressional Budget Office, https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/52849-hr1628senate.pdf | ||
| Net Investment Income Tax | 1/1/2017 | -$172.2 |
| Health Insurance Providers Tax | 1/1/2018 | -$144.7 |
| Cadillac Tax (delayed) | 1/1/2026 | -$66.0 |
| Additional Medicare Tax | 1/1/2023 | -$58.6 |
| 10% floor on deductibility of medical expenses | 1/1/2017 | -$36.1 |
| Branded Prescription Drug Fee | 1/1/2018 | -$25.7 |
| Medical Device Tax | 1/1/2018 | -$19.6 |
| Limitations on FSAs in cafeteria plans | 1/1/2018 | -$18.6 |
| Limitation on purchase of over-the-counter drugs with HSAs, Archer MSAs, and FSAs | 1/1/2017 | -$5.6 |
| Limitation on the deductibility of business expenses related to Medicare Part D | 1/1/2017 | -$1.8 |
| Tanning Tax | 10/1/2017 | -$0.6 |
| Limitation on deductible compensation to health insurance executives | 1/1/2017 | -$0.5 |
| Increase in penalty on improper HSA and Archer MSA distributions | 1/1/2017 | -$0.1 |
| TOTAL | -$550.1 | |
Besides the repeal of these taxes, the Senate bill would also make a number of other changes that would affect federal revenue, including modifying the premium tax creditA tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly. , expanding Health Savings Accounts, and repealing the individual mandate and the employer mandate.
The Senate bill would repeal the same set of taxes as the House healthcare bill, but with slightly different effective dates. To read more about each of these taxes, click here.
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