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Among Democrats’ many gripes with the House Republican health care bill is the fact that it’s missing a special protection for veterans.
"What does Trumpcare do? Yank tax credits away from veterans unlike any other American," said Sen. Richard Blumenthal, D-Conn., at a May 9 press conference.
Does the health care bill supported by President Donald Trump actually strip veterans of a tax protection?
This issue is more complex and less far-reaching than Blumenthal’s exaggerated one-liner suggests. It is possible that if the Republican bill were to become law in its current form, a subset of veterans might not be able to access financial assistance that would enable them to choose private insurance over health care through the Veterans Administration.
But the language of the bill actually treats veterans like "any other American," as opposed to what Blumenthal said. And there are regulations the Trump administration could pursue to blunt any impact (by taking a page out of the the previous administration’s playbook, we’d add).
Both the Affordable Care Act and the Republican health care bill (the American Health Care Act) provide government financial assistance to low-income Americans buying health insurance plans on the individual market through tax credits that subsidize premiums.
To qualify for the tax credits under either system, a person cannot also be eligible for other affordable health insurance options, like employer-provided insurance, Medicaid or military-related health care.
Point being, if you have access to Medicaid or can get insurance from your company, the government won’t pay for you to get insurance a different way.
But there is an exemption to that rule under the Democratic-supported Affordable Care Act. Veterans who qualify for Veterans Administration health care (not all do) but aren’t enrolled in the system are eligible for subsidized premiums — allowing these veterans to choose between VA health care or subsidized private insurance.
The Republican bill doesn’t include language that would have the same effect.
This means that if the Republican bill were to become law in its current form, some veterans might not be able to access the tax credit. That means they’d either have to get their health care through the VA or pay full freight for a different type of insurance.
This could have a tangible impact on veterans who choose not to take part in VA health care for reasons outside their control, such as living far away from VA facilities.
Blumenthal said the Republican bill in its current form could affect as many as 8 million veterans, which is the approximate number of veterans as of June 2014 who qualify for VA benefits but choose not to enroll in the program, according to the Congressional Budget Office.
But not all 8 million are in the market for a tax credit to help them buy private insurance. Many get health care through other means, such as Medicaid, their employer, or TRICARE, the military health benefits program. And as we already explained, that means they could not get federal subsidies to purchase a plan on the individual market under either Obamacare or its possible replacement.
A report by the Urban Institute, a social and economic policy think tank, found that subsidized premiums under the Affordable Care Act played a big role in the 40 percent drop in uninsured veterans between 2013-15. But the Urban Institute’s numbers suggest that the omission from the Republican health care bill would affect far fewer than 8 million veterans.
In 2010, the year Obama signed the Affordable Care Act, there were 520,000 uninsured veterans eligible for subsidized premiums, according to a 2012 report. By 2015, that number dropped to 225,000. And it’s still a subset of these groups who would be impacted by the Republican bill — those who qualify for subsidies and VA benefits.
For scale, there are 21.6 million living veterans as of 2014.
Interestingly, an earlier version of the Republican health care bill did include the relevant language, but it was removed from the final version that passed the House — a point that Blumenthal’s staff emphasized to us.
Including non-budgetary language, such as this veterans provision, could derail Republicans’ plan to get the bill through the Senate using a special procedure called reconciliation.
Rep. Phil Roe, R-Tenn., has defended the omission, saying that existing federal regulations stemming from the Affordable Care Act will be able to ensure VA-eligible veterans can qualify for the tax credit.
Why? There’s another wrinkle to all of this. The Affordable Care Act veteran exemption isn’t found in the text of the Affordable Care Act itself. It’s actually a 2012 IRS rule.
Contrary to Roe’s point, however, regulations applied to one law don’t automatically apply to that law’s replacement, said Lisa Zarlenga, a Washington lawyer for Steptoe and Johnson who served as the Treasury’s tax legislative counsel during Affordable Care Act implementation. If the Republican health bill becomes law, the Treasury and IRS might decide that the Affordable Care Act veterans rule carries over, but it’s not guaranteed, she said.
Close readers might have noticed an irony: The Democrats are criticizing the Republican bill for a protection that wasn’t built into the Affordable Care Act to begin with.
In fact, the Treasury and IRS wrote the 2012 rule to deal with the difficulty of determining a particular veteran’s VA-eligibility. The fact that this rule also gives some veterans a degree of choice they otherwise wouldn’t have was an added benefit, Zarlenga said.
Blumenthal said, "What does Trumpcare do? Yank tax credits away from veterans unlike any other American."
A reasonable person might hear Blumenthal’s statement and think that under the Republican health care bill, most or all veterans won’t get a tax credit to which they are entitled. It’s much more nuanced than that.
Under the Republican plan, like the Affordable Care Act, a person cannot qualify for financial assistance to help them buy an individual health insurance policy if they have access to other affordable health care options. Regulations written in 2012 to comply with the Affordable Care Act said this rule doesn’t apply to veterans who are eligible but not enrolled in the Veterans Administration health care system.
The Republican bill doesn’t contain language that would have the same effect. So if it becomes law in its current form, a subset of veterans might not be able to access financial assistance that would enable them to choose private insurance over health care through the VA. But a Republican administration could do what the Democrats did before them and include the benefit as part of a regulatory change.
Blumenthal’s statement is partially accurate but leaves out important details, so we rate it Half True.
Duckworth office, "Duckworth, Tester, Nelson & Blumenthal Highlight Trumpcare’s Devastating Tax Hikes on Millions of Veterans," May 9, 2017
CQ Roll Call, "Veterans' Tax Credits in Health Care Repeal Under Dispute," May 9, 2017
CQ, "House Veterans' Affairs Committee Holds Hearing on the Impact of the 2010 Health Care Overhaul Law on Veterans Affairs Department Healthcare," April 24, 2013
Urban Institute, "Uninsured Veterans and Family Members: Who Are They and Where Do They Live?" May 2012
Urban Institute, "Veterans Saw Broad Coverage Gains Between 2013 and 2015," April 2017
CBO, letter to Sen. Bernie Sanders, June 11, 2014
NPR, "Veterans Have Unusual Choice Thanks To Health Exchanges," May 7, 2013
McClatchy, "Trump promised to work for vets, but they could lose big under House health care bill," May 5, 2017
Military Times, "Lawmakers spar over new health care bill's impact on veterans," May 4, 2017
Chris Jacobs on Health Care, "The ‘Technical’ Amendment That Could Affect Millions of Veterans’ Health Coverage," March 22, 2017
Veterans Affairs, "Uninsured Veterans and Family Members: National and State Estimates and New Coverage Options Under the ACA," Nov. 21, 2013
CRS, "The Number of Veterans That Use VA Health Care Services: A Fact Sheet," June 3, 2014
Kaiser, "Compare Proposals to Replace The Affordable Care Act," May 4, 2017
Phone interview, Steptoe and Johnson lawyer Lisa Zarlenga, May 11, 2017
Email interview, Blumenthal spokeswoman Maria McElwain, May 12, 2017
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