Surprise defections and parliamentarian rulings blocked Senate Republicans this week from passing any form of legislation to repeal key provisions of the Affordable Care Act (ACA).

The Senate initially rejected the Better Care Reconciliation Act (BCRA), their modified House-passed bill (H.R 1628) that sought to repeal key provisions of the ACA including the Medicaid expansion, allowed insurers to offer limited-benefit coverage, and offered less generous tax credits.  In addition, it sought to convert Medicaid into a “block grant” program with per enrollee spending caps.  Due to a 35 percent cut in Medicaid funding to states, the BCRA never had the support of key moderate Senators but also was opposed by several conservatives who believed it did not go far enough in repealing the ACA.

The Senate parliamentarian effectively doomed the BCRA when she blocked a dozen provisions from the budget reconciliation process, which needs only 50 votes to pass.  These included some of the most popular provisions for conservatives, including waivers that would allow states to opt-out of consumer protections like essential health benefits and community rating (barring insurers from raising premiums due to pre-existing conditions).  As a result of the rulings, the waivers and provisions allowing insurers to charge old consumers 500 percent or more than younger consumers needed a filibuster-proof majority to pass. The “lock-out” period preventing consumers from buying individual market coverage for six months if they have more than a 62-day lapse in coverage also would need 60 votes.

The BCRA ultimately came-up seven votes short of passage.  However, Senate leaders were also unable to pass their primary alternative, which was to resurrect their 2015 reconciliation bill (vetoed by President Obama) that would have repealed the ACA’s premium and cost-sharing subsidies, most ACA taxes, and the Medicaid expansion—all following a two-year “transition period”.  This “repeal and delay” path was favored by President Trump.  However, five Senators largely agreed with insurer concerns that it would immediately destabilize the ACA Marketplaces.

Senate leaders were consequently left with no option but to pursue a “skinny” repeal that eliminated only the ACA’s individual and employer mandates and tax on medical device manufacturers, but included no changes to Medicaid.  The move was intended solely to get into a conference committee with House and Senate leaders from both parties in order to resolve differences between their bills.

Majority Leader Mitch McConnell (R-KY) received assurances from House Speaker Paul Ryan (R-WI) that the “skinny” repeal would not be passed by the House without a conference and thought he had the votes when he introduced it during a late-night session.  However, in a rare legislative surprise, Senator John McCain (R-AZ) joined with Senators Susan Collins (R-ME) and Lisa Murkowski (R-AK) in opposing the “skinny” repeal, causing the legislation to fail by a single vote.

Unless they can change the minds of opposing Republicans, the shocking development leaves Senate leaders with little alternative but to pursue a bipartisan compromise.  Senate Republicans need the support of least eight Democrats to proceed with “ACA fix” legislation and Democratic leaders have already outlined several improvements they would support.  These include federal funds for states to create reinsurance programs that replace the extra compensation insurers received during the first three years of the ACA for extraordinary claims (which the Trump Administration has already approved for Alaska).   Other changes likely to have bipartisan support including basing ACA tax credits on age as well as income, allowing the credits to be used to purchase certain types of non-Marketplace coverage, and guaranteeing the availability of the ACA’s cost-sharing subsidies.


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