By Yasmeen Abutaleb
WASHINGTON (Reuters) - Republicans delivered their biggest blow yet to Obamacare in their tax overhaul that won final congressional approval on Wednesday, and delayed until 2018 consideration of legislation that could help mitigate some of the damage to the 2010 law.
The $1.5 trillion tax bill, the biggest overhaul of the U.S. tax code in three decades that now awaits Republican President Donald Trump's signature, includes a provision that removes a penalty imposed under Obamacare for Americans who do not obtain health insurance, a central tenet of the healthcare law.
The aim of the penalty was to force younger and healthier Americans to buy coverage to help offset the cost of sicker patients. The penalty helped to uphold a popular Obamacare provision requiring insurers to charge healthy people and those with a pre-existing medical condition the same rates.
Republicans have opposed the law formally known as the Affordable Care Act, the signature domestic policy achievement of Trump's Democratic predecessor Barack Obama, since its inception. Intraparty divisions this year prevented them from repealing and replacing Obamacare, a top campaign promise, despite controlling Congress and the White House.
But gutting the so-called individual mandate penalty significantly weakens the law. The nonpartisan Congressional Budget Office said 13 million people will lose coverage over the next decade, and insurance premiums will rise 10 percent annually for most years over the same period.
"We have essentially repealed Obamacare," Trump told a meeting of his Cabinet at the White House. "And we'll come up with something that will be much better, whether it's block grants (to the states) or whether it's taking what we have and doing something terrific."
2018 BATTLES LOOM
Delaying action on three bills - two that would help stabilize the online markets set up under Obamacare to help individuals obtain insurance and another that would reauthorize a children's health program - sets up fresh battles over healthcare in Congress early next year.
Republican Senator Susan Collins previously had said her vote for the Republican tax legislation hinged in part on a promise from Senate Majority Leader Mitch McConnell to pass the Obamacare stabilization bills by the end of the year.
Collins and fellow Republican Senator Lamar Alexander, who together co-sponsored the two Obamacare stabilization measures, said they dropped their demand after it became clear that Congress would be able to pass only a short-term funding bill to keep the government open past Friday rather than a bill covering the remainder of the 2018 fiscal year.
They said McConnell assured them he would support the bills next year and that they would ask that the legislation be brought up in January.
The two senators also said legislation to reauthorize the Children's Health Insurance Program (CHIP), which provides health insurance for about 9 million children whose families do not qualify for the Medicaid insurance program for the poor, would be pushed to next year. Federal funding for CHIP expired on Sept. 30.
States have been spending whatever was left of their CHIP funds, and some have received temporary relief from a $3 billion reserve. More than a dozen states are poised to send warning notices to families by the end of this month that their coverage could end.
"There is every reason to believe that these important provisions can and will be delivered as part of a bipartisan agreement," Collins and Alexander said in a joint statement.
Even though Congress failed to pass comprehensive Republican healthcare legislation, Trump's administration succeeded in weakening Obamacare through executive actions. Trump in October cut off billions of dollars of subsidy payments to insurers that had helped cover medical expenses for low-income Americans, halved the Obamacare open enrollment period and slashed federal advertising encouraging people to sign up for coverage.
Democrats and healthcare advocacy groups assailed the repeal of the individual mandate penalty.
"The tax reform bill not only increases the federal deficit as well as healthcare costs, but also results in a significant loss of health coverage for millions of Americans," the National Multiple Sclerosis Society said in a statement. "People with pre-existing conditions, like MS, will be harmed the most."
(Reporting by Yasmeen Abutaleb; Editing by Will Dunham)