BREAKING: Senate Kills 'Plan A' and 'Plan B' Obamacare Replacement, Including 'Clean Repeal'

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Posted: Jul 26, 2017 2:55 PM
BREAKING: Senate Kills 'Plan A' and 'Plan B' Obamacare Replacement, Including 'Clean Repeal'

UPDATE - As expected, Senators have also rejected a "clean repeal" bill (something of a misnomer), with seven Republicans joining all Democrats in opposition. Six of those 'nay' votes came from members who voted in favor of nearly the exact same measure in December of 2015, when an Obama veto guaranteed their actions would not take effect. The bill would have cleared out much of Obamacare's framework without implementing any simultaneous replacement (quite unpopular); that task would have been punted to some time in the next two years.  Now what?  See below:


***Original Post***

As I was saying earlier, the heavy lifting is just getting started for Mitch McConnell and Senate Republicans, in spite of Tuesday's procedural victory.  Leadership's preferred vehicle for an Obamacare replacement package -- the long-negotiated Better Care Reconciliation Act (BCRA) -- has been defeated by Senators, and it wasn't particularly close.  Because two key elements of the legislation have not been scored by the Congressional Budget Office (Ted Cruz's consumer choice amendment for conservatives, and Rob Portman's Medicaid amendment funding for moderates), their inclusion in the bill meant that a threshold of 60 votes was required for passage. Nine Republicans joined lockstep Democrats in voting against advancing that plan, leaving just 43 "yes" votes on the table.  Not even close:

The first item members took up last night was the Better Care Reconciliation Act. That is the carefully negotiated package that McConnell spent weeks crafting, with compromises to get conservatives like Ted Cruz (R-Tex.) and moderates like Rob Portman (R-Ohio) on board. But nine Republicans broke ranks and voted no. The diversity of those who opposed the measure underscored the ideological split within the Republican conference about the best path forward on health care. The group included moderates like Susan Collins (R-Maine) and Lisa Murkowski (R-Alaska), as well as conservative purists like Mike Lee (R-Utah) and Rand Paul (R-Ky.). Also voting no were Bob Corker (R-Tenn.), Tom Cotton (R-Ark.), Lindsey Graham (R-S.C.), Dean Heller (R-Nev.) and Jerry Moran (R-Kan.).

That's a pretty broad coalition of Republican 'nay' votes, making it hard to pin the blame for the measure's defeat on any particular wing of the conference (setting aside the 60 vote issue).  In light of this outcome, the likelihood that the updated "clean repeal" option, modeled after the bill that passed the Senate in late 2015, will succeed is virtually nil.  Paul, Lee and a few others will probably flip their votes to yes, but the moderates will shoot it down, likely with a number of BCRA supporters joining them.  We'll know later this afternoon.  Regardless of whether "Plan B" receives more votes than "Plan A," neither option will be close to 50.  So what then?  There will be more debates and more votes to come, but McConnell and company are likely shifting their gaze to the "skinny repeal" concept we flagged yesterday and analyzed this morning.  That's where this process appears to be headed -- with a "vote-a-rama" of unlimited amendments arriving by the end of the week.  Two questions: (1) What elements would a "skinny repeal" bill contain?  We've linked to likely suggestions on this front, but we won't know until it takes shape. (2) Does McConnell want the "skinny" bill that might pass to actually become law, or simply to serve as a vehicle to get the legislation into a conference committee with the House, where it would change yet again?

To reiterate my reasoning fromthis morning, even as many people are talking about the latter, I have suspicions that it's the former because conferencing with the House would produce a brand new bill -- which would ping back to the Senate, where three Republican votes could kill the whole enterprise.  That's a big risk.  The strategy may end up being to pass a "Plan D," pared-down, "skinny repeal," have the House do the same, then let President Trump sign it and declare victory.  Then let Sec. Price use his substantial regulatory discretion to loosen additional Obamacare restrictions, and finally attempt to peel off more parts of the law with additional piecemeal efforts down the line.  Let's say, for the sake of argument, that this is a politically-viable path forward (for what it's worth, John Boehner thinks it's the only possible path forward).  What to make of this apparent complication, raised by Jim Capretta?

[The] more important problem with the Republican alternatives to the individual mandate is that they cannot be enacted using budget reconciliation. Under the Senate’s Byrd Rule, reconciliation bills -- which can pass in the Senate with a simple majority instead of the usual 60 votes -- are supposed to include only provisions which affect either federal spending or revenues. Changes in federal laws that are more regulatory in nature are considered extraneous and can be stricken from the bill if a Senator objects. Waiving the objection takes 60 votes. It is very hard to make the case that the GOP provisions in the ACA replacement bill, which are intended to encourage enrollment in private insurance, are primarily budget-related items. Their main effect is to set the terms under which consumers can buy a private insurance plan. The Byrd Rule is pretty clearly aimed at preventing these kinds of “regulatory” provisions from being enacted under expedited procedures. It is not surprising, therefore, that the Senate parliamentarian, who is the official responsible for making these calls, has indicated the six-month waiting period in the BCRA violated the Byrd Rule. Democratic Senators are sure to move to strike it when, and if, they are ever given the chance. The House’s 30-percent premium surcharge seems certain to be viewed similarly by the parliamentarian.

If both of the potential individual-mandate-replacing, free-riding-discouraging mechanisms to incentivize consumers to purchase coverage (the inclusion of which is essential to preventing a rapid death spiral) are stricken by the parliamentarian, then any version of "repeal and replace" becomes logistically disastrous.  Including "skinny" repeal.  It does not appear as though a final determination has been made on these critical questions, however, and one Senate GOP source tells me there's a budgetary case to be made on behalf of either provision.  A separate leadership source says a resolution to this issue is being actively pursued.  Republicans should formulate an extra back-up plan that more conspicuously falls within reconciliation's Byrd Rule strictures, just in case.  In any event, the hour may soon arrive when Republican lawmakers from across the ideological spectrum must decide whether incremental progress in the form of a disappointing "Plan D/skinny" bill is preferable to the sort of pure Obamacare bailout Democrats are likely to pursue if GOP efforts fall apart.  

I'll leave you with this thought, which occurred to me as I constructed this analysis: Because a "skinny" repeal would jettison Obamacare's central individual mandate, the CBO is likely to score even that scaled-down legislation as resulting in 20-plus million people "losing" coverage.  CBO's stubborn faith in the power of that mandate, even in the face of real-world data that has consistently exposed their modeling as extremely flawed, will continue handing Democrats a ready-made talking point that most of the media dutifully parrots as fact.  I illustrated the folly of this approach on Twitter with a sports analogy: