House GOP Thinks It Can Amend Obamacare In The Coming Months

While congressional leaders continue to debate whether to pursue near-full repeal of the Affordable Care Act through budget reconciliation, and GOP presidential candidates lay out Obamacare-replacement proposals, House Republicans are looking at a smaller batch of changes to the health care law they think could make it to President Obama's desk.

House Ways and Means Health Subcommittee Chairman Kevin Brady told National Journal that his panel could mark up health care tax legislation later this year. He floated bills related to over-the-counter drugs, health savings accounts, and—perhaps most ambitiously—a repeal of Obamacare's unpopular "Cadillac tax" on high-end insurance plans.

The health care agenda will be determined in part by Capitol Hill's other business. Lawmakers have a full plate when they return from August recess: Avoid (or create) a government shutdown at the end of September, raise (or force a fight over) the nation's debt ceiling in October, debate the Iran nuclear deal, and host a visit from Pope Francis, for starters.

"We've heard for so long from both parties ... about support for" making smaller changes to the law, Brady said, adding later in reference to reconciliation that "in the House, we've had numerous opportunities to repeal all or many of the parts."

Other sources on and off the Hill also said they are anticipating some kind of health care package to get a look in the fall. A spokesman for Ways and Means Chairman Paul Ryan said in an email: "A markup is possible, but we're not ready to announce anything, and especially don't have a list of specific bills at this point."

The question is whether congressional Republicans will broadly accept any smaller-scale changes to Obamacare that might seem to suggest the law is here to stay. They have passed several over the last few years, but in the midst of a presidential primary campaign in which every candidate is pledging to uproot the law and an internal Hill debate about whether to send full repeal to the president's waiting veto pen, the rank-and-file might not go for it.

And even if they did, there is no guarantee that Obama would acquiesce to any changes to his signature domestic policy achievement, no matter how small, as he seeks to cement its legacy.

One item cited by Brady and multiple other sources is changing Obamacare's rules for various tax-preferred accounts, like flexible spending accounts and health savings accounts, and the purchase of over-the-counter drugs. The health care law barred using those accounts to buy over-the-counter drugs without a prescription. House Republicans want to reverse that policy, which conservatives have derided as effectively a tax increase, and they could attract some bipartisan support to do it.

Of course, any health care bill has the possibility of becoming a Christmas-tree bill. Every interest group will likely try to glom to a health care package that actually has a chance to move; the health insurance industry, for example, has long sought to repeal the insurance tax levied under Obamacare.

Numerous other niche bills are already in existence. Former Rep. Aaron Schock, who sat on Ways and Means before resigning amid a spending controversy earlier this year, introduced a bill to exempt Christian Scientists from Obamacare's individual mandate. A recent federal court ruling subjected Native American-owned businesses to the law's employer mandate; a bill has already been introduced in the House to explicitly exempt them.

Another possibility, outside Obamacare, is allowing seniors to continue making health savings account contributions, one source said; they are currently barred once they have enrolled in Medicare.

Potentially the biggest-ticket item would be a repeal of Obamacare's Cadillac tax. The tax will be applied to the most generous health insurance plans starting in 2018. Groups as ideologically diverse as labor unions and the U.S. Chamber of Commerce are united against it. Even Democratic presidential front-runner Hillary Clinton said she was "examining" the policy.

The votes are almost certainly there: Bills introduced in the House to repeal the provision have attracted a combined 214 sponsors, and more than half of those are Democrats.

But Republicans might actually be reluctant to roll the tax back. For one, while the move has the allure of repealing an Obamacare tax, it would also give Democrats a political win they've been seeking since unions mobilized against the tax. The policy merits are also a little murky. Many conservative wonks admire the goals if not the particulars of the tax, which is to drive down health care costs by reining in insurance benefits. GOP health care proposals often suggest ending or limiting the tax exclusion for employer-provided insurance, which has a similar effect, and the Cadillac tax could be seen as the first step down that road.

Altogether, the specific policies in play are relatively small, but they would represent actual constructive policymaking around the ACA, rather than the show repeal votes that have taken up most of the legislative oxygen since 2010.

"It's a modest package overall," one lobbyist familiar with the discussions said. "Something that they can argue, 'These are bad things about Obamacare' and just toss it out there."

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