'Skinny Repeal:' Is a GOP Obamacare Fallback Plan Emerging?

Posted: Jul 26, 2017 10:25 AM

Following yesterday's dramatic Senate vote on the 'motion to proceed' (MTP), Republican Senators must now sort through the harder part: Deciding what exactly comes next.  Prior to Tuesday afternoon's vote, a document began to circulate purporting to outline GOP leadership's game plan moving forward.  The most eyebrow-raising item on the following list comes just before the final, 'go to conference with House' bullet point:

We'll get to "skinny repeal" in a moment but first, a question: In light of the painful, teeth-pulling process that was required to even get onto a bill in the Senate -- and considering how corralling the requisite votes to pass the House bill was also a precarious feat -- is a conference committee really in the cards here?  That step would involve empaneling a group of Senators and Representatives to sit down and hammer out a new bill that reconciles the two chambers' distinct pieces of legislation (assuming the Senate is even able to pass something, which is far from assured).  If they're able to come up with something that's tentatively satisfactory, that new legislative product would then bounce back to each respective body, setting up yet another round of treacherous floor votes, either of which could fail.  It's foolish to make any confident predictions about anything in Washington these days, but I wouldn't be surprised if the House is pressured to just pass whatever might emerge from the Senate, then send it over to the White House for President Trump's signature.  That would be much cleaner and a lot less fraught with risk.  

But the hypothetical Senate-passed bill's fate in the lower house could very well ride on its final contents, which remain a mystery.  When he expressed hedged confidence about the Senate's ability to clear the crucial procedural hurdle yesterday, Sec. Price also told me that Mitch McConnell almost certainly does not have 50 votes to approve any of the "repeal and replace" plans floating around the upper chamber.  Statements from Senators ahead of the MTP confirm this assessment, which presumably encompasses (a) the 2015 "full repeal" bill (which is not truly full repeal), (b) the compromise BCRA (say, wouldn't it be worthwhile to get those Cruz and Portman amendments mentioned above formally scored?), and (c) various side proposals ranging from Graham/Cassidy to Cassidy/Collins.  

But if the Senate GOP determines that its members are incapable of agreeing upon a more sweeping Obamacare replacement bill -- which would constitute a resounding failure unto itself -- this "skinny repeal" option looks like a version of the 'Plan D' fallback solution we addressed last week.  As National Review frames it, the goal would be to pass a scaled-back bill that at least rolls back some of the failing Democratic law, as opposed to doing nothing at all, or joining with Democrats for a non-conservative bailout.  If McConnell cannot get to 50 votes on a more extensive replacement bill (and the GOP must do everything it can to avoid that outcome) surely there are some provisions that still unite Republicans.  A "skinny" bill would seek a more modest set of right-leaning changes to Obamacare than other plans.  Right-leaning New York Times columnist Ross Douthat advocated such an approach in a recent piece:      

First, the smaller bill would repeal the individual mandate requiring the purchase of health insurance. It would replace it, as the Senate bill does, with a continuous-coverage requirement — a waiting period to purchase insurance if you go without it for more than two months. Second, the bill would repeal some of the taxes on health care spending, saving and services imposed by Obamacare — including the taxes on medical devices and prescription medications, the higher threshold for deducting spending on chronic care, and the limits on contributions to health spending accounts. Third, the bill would maintain the stabilization funds that the Senate legislation pays to states and insurers to help cover the sickest Americans and keep exchange prices from spiraling upward...

That’s approximately $250 billion that the small-ball bill would need to find in spending cuts. It would find those savings by imposing, like the House and Senate bills, a per-capita cap on future Medicaid spending, but a less draconian one than the current legislation envisions. Instead of wringing almost $800 billion out of Medicaid over 10 years, it would try to reduce the program’s spending by $250 billion — just enough for deficit neutrality. That’s it. That’s the whole thing. Eliminate the hated mandate, keep the exchanges stable, cut a few health care taxes, and pull Medicaid spending downward. Pass the package, declare victory, and pivot to tax reform.

Republicans might sprinkle in a few additional pieces into that mix, such as adjusting Obamacare's premium-increasing and market-distorting "age bands," and also eliminating the law's employer mandate.  Douthat concedes that, "all of this would be tepid and incrementalist, a failure compared to the dreams of full-repeal advocates and the best-laid plans of right-wing wonks. But the Republican Party is too divided on health care, too incompetently “led” by its president, and too confused about the details of health policy to do something that’s big and sweeping and also smart and decent and defensible," he writes.

This "Plan D" -- or "skinny" repeal, or "smaller ball" -- alternative is an improvement over both the crumbling status quo and potential major giveaways to Democrats in the name of "bipartisanship."  But it would still reduce the scope of needed Medicaid reforms, retain the law's coverage mandates, and continue the subsidies.  And it may only marginally ameliorate the law's fundamental flaw of unaffordability, leading to an adverse selection spiral.  Not an ideal outcome, to put it mildly.  But why spend so much discussing it here?  Because I suspect there's a reason why GOP leaders included it on their menu for the first time: They may have a sense that it's the only thing that can pass.  John Boehner, call your office.  In the meantime, Senators will spend hours debating and offering amendments over the next few days.  McConnell is reportedly telling members that he'd like to get something passed by Friday: 

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Kevin McCullough

That's, uh, the day after tomorrow.  That seems...rather ambitious, given how much whip count progress still needs to be made.  We'll see.  I'll leave you with this snark, which isn't entirely inaccurate -- although I renew my skepticism of going to conference: