Senate Debt Limit Framework Emerges (Updated)

Posted October 14, 2013 at 4:01pm

Updated 7:27 p.m. | Senate leaders appeared to be closing in on a framework for a deal to avert a default on the nation’s debt on Monday afternoon.

The emerging plan would reopen the government until Jan. 15, 2014, and extend the debt limit into February — but it would not address the medical device tax, which many Republicans and Democrats would like to repeal.

A source familiar with the negotiations explained that Majority Leader Harry Reid pushed to get the repeal of the tax removed from the negotiations. The Nevada Democrat has been a vocal opponent of repealing the excise tax, at one point calling the idea “stupid” at a news conference.

The White House also pushed back against including a medical device tax rollback in the deal.

It appeared likely that the deal would punt the question of turning off automatic spending cuts, known as the sequester, to another round of budget talks, with a deadline of Dec. 15. But under one proposal, if the sequester came into effect there would be increased flexibility to deal with it.

Nothing’s finalized and things could change as talks continue, however. Senate Republicans had been expected to meet Monday evening, but that was delayed until late Tuesday morning due to concerns about attendance.

It looks like talks are leading toward including a requirement that the Health and Human Services Department certify that the agency is able to verify the incomes of those receiving subsidies to buy health insurance on the Obamacare exchanges.

That win for Senate Republicans would be paired with a Democratic victory in delaying a scheduled reinsurance tax under Obamacare that would hit in 2014 and run for three calendar years in order to create a pool of reserve funds for insurance company losses.

Insurers in the exchanges are required to cover higher-risk individuals (such as those with pre-existing conditions). Unions had pushed for that delay.

It amounts to $63 per covered individual.

“The statute requires all health insurance issuers and third-party administrators on behalf of self-insured group health plans to make contributions under this program to support payments to individual market issuers that cover high-cost individuals (payment-eligible issuers),” the Internal Revenue Service said in a fact sheet explaining that tax.