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The Chronicles of Zombie Trumpcare: Dead in the Senate, For Now

July 18, 2017

Big news that you've already heard - with significantly more than two Senators opposing the latest version of Trumpcare, Majority Leader McConnell has given up on this version of the bill. I'm not happy on the reporting of what's going on here, so wanted to write something quick. I'm going to do as little future-predicting as I'm able to.

 

Let's start with reconciliation. Reconciliation is that thing they use in the Senate to pass legislation with 50 votes instead of 60. With the GOP holding "only" 52 Senate seats, any plan to repeal (rather than fix) Obamacare will have to go through the reconciliation process. But, reconciliation is tricky - tricky enough where I need to caveat this entire piece by saying there are some nuances with which not even I am familiar.

 

In order to pass via reconciliation, a bill needs to meet certain criteria, of which the most important are:

 

  1. Reconciliation bills must reduce the cumulative deficit. Specifically, when a House bill moves to the Senate, in order to go through reconciliation, the Senate version must have more deficit reduction than the House version.

  2. It can not have any provisions that are not "germane" to the budget. Specifically, provisions in the recent Senate bill giving insurance companies the ability to sell non-compliant plans seemed unlikely to be considered germane. This is the Byrd Rule.

  3. Reconciliation is directly related to the budget, which you can learn more about in our piece on spending. Specifically, to pass through reconciliation, a bill needs to come from instructions in the budget resolution. Because there is only one budget each year, there can only be one reconciliation bill each year.

 

Of course, there are exceptions all over. For criteria number 2, ruling with regard to "germane" are made by the Senate Parliamentarian, who was hired by the Republican leadership. Also, and this would be unprecedented, but she can also potentially be overruled. For criteria number 3, the current GOP congress played a nice trick. They did not pass a 2017 budget resolution last year, passing 2017 and 2018 this year instead. Therefore they have 2 vehicles for reconciliation currently on the table - one for health care and one for tax reform.

 

Let's go back to what Senators Lee and Moran (and others, who I will call collectively, the "Rebels") said last night: they would vote against the "motion to proceed." Basically, this means that, in addition to refusing to support the bill, they wouldn't even allow it to be brought up for debate. I'm pushing the limits of my knowledge of congressional procedure, but I think this creates an even larger problem for McConnell. If McConnell wants to use the vehicle for another purpose (such as a different health insurance bill), my understanding is that it would need to pass said motion first - after which it could be amended. In other words, the Rebels could have just voted against the existing BRCA bill - but by being against the motion to proceed, they are de facto against any bill.

 

Now, in McConnell's statement, he said that he planned to move next to "repeal" Obamacare. News organizations reported it that way - but this is not what he meant (so far as I and most others can tell). Full Obamacare repeal includes provisions that certainly can't fit into reconciliation; if nothing else, repeal would greatly increase the deficits, so no way the Parliamentarian can even be overruled here. What McConnell meant was he would pass a bill similar to the one vetoed by President Obama in 2015. This bill left in place the ACA's insurance regulations (under 26, pre-existing protections) but ended the taxes and subsidies. Calling this a repeal is not accurate - better would be to say that he (and, apparently, Trump) want to "defund" Obamacare.

 

But there are a few problems with that. The CBO scored the 2015 bill - and it made the ones being considered now look like brilliant legislative acts. Under defunding, 18 million fewer people would have health insurance in one year, increasing to 32 million in ten years. 75% of the population would live in places with no insurers in the individual market. Premiums would double. Two years - along with neglect and subversion from the new "Administration" - and the CBO predictions would probably be even worse. This is about the worst of all possible plans. So far, it appears that there are already enough GOP Senators against so-called "repeal and delay" to kill it.

 

There is also word out today that the GOP will end the so-called CSR payments. Without going into technicalities, this is money that is owed by the government to insurance companies. They are not "bailouts" any more than payments to insurance for other public-private partnerships like Medicare Advantage are. But, if the CSR payments were cancelled, insurers that are supposed to receive them would be permitted to cancel affected policies immediately - i.e. within one month. Around seven million people would immediately lose health insurance. Insurers have also said that the potential cancellation of the CSRs is causing them to increase premium requests for 2018 - by as much as 20-30%. If this happened, the government would still pay out a similar amount of money for a different type of subsidies (APTCs; this gets technical, recommend you just trust me). In other words, the GOP's plan B is to kick millions off health insurance, increase the prices for everybody and not even save money for the Federal Government. Wish I could assure you they will come to their senses - but unlike Obamacare repeal, this could come to pass by Trump's hand alone.

 

During the process, many Republicans have noted that it just might be time to sit down and work with Democrats and fix some things in the current health insurance markets. There is some horse trading to have here. The GOP hates the ACA's employer mandate and Cadillac taxes. The Democrats would like the CSRs locked in permanently and to make various other technical fixes to improve competition (the latter generally having no cost to the Government). Of course, by working with the Democrats, the GOP would be more-or-less admitting that Obamacare is actually a pretty decent system that needs some tweaks and improvements to make it better. I'm not sure how that would go over with their base, after seven years of being fed lines about the "Obamacare disaster".

 

In any case, the only prediction that I will make is that everybody will go back to their corners, at least until the August recess. It seems that the Lee/Moran defection was genuinely unexpected, either by the White House or Senate Leadership; everybody has some wounds to lick. But I do not think Trumpcare is dead - although it may have reached a point where the GOP wants to completely avoid the topic, at least for a while.

 

 

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