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Senate GOP’s Fallback Plan Gains Support After Vote to Repeal Health Law Fails

Republicans pin hopes on ‘skinny repeal’ of several Affordable Care Act elements; insurers blast the proposal

The Wall Street Journal
By Kristina Peterson, Michelle Hackman and Stephanie Armour
July 26, 2017

WASHINGTON—Senate GOP leaders picked up support Wednesday for their plan to pass a scaled-back bill to repeal a handful of elements in the current health law, and then open negotiations with House Republicans to try to bring together their two very different bills.

Republican senators said they recognized passing a “skinny repeal” would essentially postpone tough decisions on health care until later, but they seized on it as potentially their best option as the Senate this week began considering and rapidly discarding other plans, with no alternative appearing likely to attract the 50 Republican votes needed to pass.

A measure to repeal most of former President Barack Obama’s 2010 health law, with a two-year expiration date to allow lawmakers to craft a replacement, failed in a 45-55 vote on Wednesday, as seven GOP senators joined all Democrats in voting against it. That came after the latest version of the broader Senate Republican bill was defeated 43-57 on Tuesday, leaving the leaders with few options.

Senate Majority Leader Mitch McConnell (R., Ky.) has pitched the skinny repeal plan in recent days. GOP leaders say that passing it could be their only alternative to giving up on a health overhaul, and that the bill could be improved in Senate-House talks.

With no other plan capable of unifying Republicans, the skinny repeal plan gained traction with senators from the party’s conservative and centrist wings, as well as rank-and-file Republicans who didn’t want the health-care push to die in their chamber. The House narrowly passed a far more sweeping bill in May.

“I’ve been saying for months we should start with what we agree on, and try to build up,” said Sen. Rand Paul (R., Ky.). “The previous strategy was to start big and try to have the whole kitchen sink in there.”

The proposal under discussion would likely end the much-debated requirement under the Affordable Care Act that most people have insurance or pay a penalty. It would also overturn the requirement that most employers provide health insurance to their workers.

But it would leave in place much of the broad shape of the Obama administration’s signature health law, including the expansion of the Medicaid program for low-income Americans in 31 states; regulations that require insurers to cover people regardless of their health status; and a mandate that most health plans cover a raft of specific benefits such as maternity care. Republicans haven’t been able to agree on how, or whether, to modify or cut those elements.

Insurers and Democrats reacted with alarm to the idea that Republicans might pass the scaled-back bill.

Health insurers warn of the danger of ending the individual insurance mandate without other provisions to prod young, healthy people to buy insurance. Without such efforts, individual insurance markets have in the past gone into meltdowns known as “death spirals,” they say, meaning cycles of rising premiums and shrinking enrollment, leaving insurers covering the sickest, costliest patients.

Some GOP senators, including Shelley Moore Capito of West Virginia and Mike Lee of Utah, were undecided on the idea Wednesday, and it’s not clear it will have the votes to pass. Mr. McConnell presides over a narrow 52-48 Republican majority and can lose no more than two Republicans, with Vice President Mike Pence breaking a potential 50-50 tie.

The proposal appealed to some centrist Republicans, who have been uneasy over $756 billion in cuts to federal Medicaid funding that was part of earlier GOP proposals.

Sen. Dean Heller (R., Nev.) said he appreciated that the skinny repeal did not seek to make cuts to federal funding for Medicaid and viewed it “favorably” on Wednesday. “Right now Medicaid expansion has worked for the state of Nevada,” he said.

But Mr. Heller and other senators acknowledged that passing such a measure would open up unpredictable negotiations with House Republicans, who would likely lobby to return Medicaid cuts and other conservative measures.

The House could take up and pass the skinny repeal bill as is, if it clears the Senate, but that appears unlikely as a first step. Rep. Mark Meadows (R., N.C.), the chair of the conservative House Freedom Caucus, a group of about three dozen conservative lawmakers, said he would oppose such a move.

“Would we send that to the president? The answer is no,” Mr. Meadows told reporters, saying a scaled-back Senate bill should serve only to jump-start negotiations.

But striking a broader compromise between the two chambers wouldn’t be easy, given the deep divisions between Republicans on a variety of issues, including whether, how much and how quickly to cut Medicaid funding.

Sen. John Thune (R., S.D.) warned that Republicans have to see the pared-back legislation as a good enough product to become law, in case the House decided to simply pick it up and pass it.

“If it represents what we can do, hopefully we can improve on it and get it in shape in conference with the House,” he said. But “maybe the House will pick up what we pass.”

Health and Human Services Secretary Tom Price signaled support for the skinny repeal plan Wednesday, urging lawmakers to vote in favor of any measure that stands a chance of passing.

“What we need to do in the Senate is figure out what the lowest common denominator is,” he said on CNBC. “Whatever can get us to 50 votes so that we can move forward on a health-care reform legislation.”

Indeed, Republican leaders’ strategy at this point is to keep the health push alive as long as needed, in the hopes of striking a deal at some point despite having no road map on how to do so. Previously, Mr. McConnell had signaled he would move on to other issues if a health plan stalled in the Senate.

In a move that could siphon support for the skinny repeal proposal, a group of five GOP governors and five Democratic governors pressed senators to abandon the idea. The governors wrote in a letter to Senate leaders Wednesday night that a skinny repeal plan is “expected to accelerate health plans leaving the individual market, increase premiums, and result in fewer Americans having access to coverage.” They instead urged senators to work with governors and colleagues from both parties to shore up the individual insurance market.

Attacking the proposal, Sen. Elizabeth Warren (D., Mass.) said on the Senate floor Wednesday the skinny plan would boost premiums for many Americans, in part because Senate passage would usher in a period of uncertainty.

“The Senate Republicans will be responsible for every dollar of premium increases that occur over the weeks and months that follow, as this bill sits in a conference with the House and insurance companies jack up prices because they don’t know what they might be required to cover,” Ms. Warren said.

Senate Minority Leader Chuck Schumer (D., N.Y.) said Wednesday night that Democrats wouldn’t offer any amendments until GOP leaders had unveiled their final version of a health-care bill.

About 15 million fewer people would have coverage in 10 years if the ACA individual mandate is repealed, according to an estimate last year from the nonpartisan Congressional Budget Office. Premiums on the individual market would increase 20% because healthier and younger people, who help offset the costs of older and sicker consumers, would likely drop coverage, the CBO found.

“A system that allows people to purchase coverage only when they need it drives up costs for everyone,” Blue Cross Blue Shield Association said in a statement on Wednesday.

A new CBO analysis released Wednesday night, which was requested by Democrats based on reports of the skinny repeal plan, pegs the number of additional uninsured at 16 million over the next decade.

The Senate’s failure to pass the repeal-only proposal on Wednesday was notable in part because of the 52 current GOP senators, 49 voted for the same repeal bill in 2015. Ms. Collins was the only current Republican senator to vote against it at the time.

But some senators said conditions had changed. “In 2015, we could have waited two years for relief, but we cannot now,” Sen. Lamar Alexander (R., Tenn.) said after the vote. “I don’t think Tennesseans would be comfortable canceling insurance for 22 million Americans and trusting Congress to find a replacement in two years. Pilots like to know where they’re going to land when they take off, and we should, too.”