Mitch McConnell on Capitol Hill Manuel Balce Ceneta / AP
Obamacare repeal is dead. Long live Obamacare repeal.
Senate Republicans’ Better Care Reconciliation Act fell apart in spectacular—and perhaps definitive—fashion this week. The defections of Senators Rand Paul, Mike Lee, Jerry Moran, and Susan Collins—who’d each announced opposition to the bill by Monday night—all but killed the party’s plan to replace Obamacare.
In his statement late Monday night, Senate Majority Leader Mitch McConnell proposed a new tack: “a repeal of Obamacare with a two-year delay to provide for a stable transition period to a patient-centered health-care system that gives Americans access to quality, affordable care.” But that Plan B would soon be in peril, too. On Tuesday, Republican lawmakers Shelley Moore Capito, Lisa Murkowski, and Collins announced that they did not support the so-called “repeal-and-delay,” which is effectively a repeal-only plan. McConnell can lose two votes from his conference. He can’t lose three.
Mitch McConnell Vows Obamacare Repeal Vote in the ‘Near Future’
But the Republican leader nevertheless seemed ready to press forward with his fallback plan when he addressed reporters Tuesday afternoon. “Sometime in the near future, we’ll have a vote on repealing Obamacare,” he said at a press conference. “Essentially the same vote that we had in 2015.” Even with what seems to be a fatal lack of support for repeal-and-delay, McConnell appears to be using the upcoming vote, on a motion to proceed, as a way to get defectors on the record—and challenge them to repeat their vote from an identical measure that passed the chamber with only two Republican nays in 2015.
In order to pull 50 votes out of a hat—presuming the vice president would break any tie—McConnell would have to sell moderates on the virtues of an immediate repeal, and it’s hard to see why they’d bite if they didn’t like the BCRA.
Actually, “repeal” isn’t the right word here. To pass the plan via a simple filibuster-proof majority in the Senate reconciliation process, lawmakers can’t fully roll back Obamacare’s provisions. They could change funding amounts for premium tax credits and the Medicaid expansion, and zero out the tax penalties for the law’s mandates and the taxes that support it, but they couldn’t completely do away with elements like the ACA’s protections for people with pre-existing conditions.
The Congressional Budget Office found that the 2015 reconciliation repeal—which was vetoed in January 2016 by former President Barack Obama—would increase the number of uninsured people by 32 million over 10 years, an increase of 10 million over the office’s projections for the last draft of the BCRA. The timing of those losses would depend on when the mandates, tax credits, and Medicaid expansion are repealed, but the gist is the same: Most people who were newly able to afford insurance under Obamacare (and have been for years, now) would find themselves unable to pay for it at some point.
The CBO also found that under a repeal-only law, premiums in the Obamacare exchanges would skyrocket, increasing by 50 percent or more after the tax credits and individual mandates are repealed. That’s because while there would be no mandates to keep healthy people in risk pools, offsetting the costs of sicker patients, insurers still couldn’t deny those sicker people coverage or adjust prices to reflect their individual health needs. That means exchange coverage would become more and more expensive, and would likely become a reserve just for the sickest people with the most desperate coverage needs.
That is, if the insurers even participate. Right now, the largest enticement for insurers to cover people on the exchanges is the pot of money from Obamacare tax credits, cost-sharing subsidies, reinsurance, and risk adjustment that they benefit from. Even under the current ACA structure, the ranks of insurers and the number of plan options are thinning in most exchange markets. A repeal plan would immediately make those exchanges unworkable for many insurance companies.
While the repeal plan assumes there would be a delayed replacement to presumably provide more money for the exchanges, aside from some companies that could soak up risks and potentially dominate exchanges in the future, many insurers wouldn’t be willing to wait around for a replacement that may never come. The CBO estimates around three-quarters of Americans would live in areas without functioning exchanges at all after a decade of repeal.
While the impact to state Medicaid programs under this proposal would be less substantial than the BCRA’s radical funding changes and major cuts over two decades, the loss of the Medicaid expansion would also have major effects. Upward of 15 million people—depending on state decisions to continue or discontinue covering them—would lose coverage, and they would find themselves without exchange plans to turn to. This population includes many or most of the able-bodied adults enrolled under Medicaid today, and removing funding for their coverage could destabilize public-health efforts against the opioid crisis and other drivers of mortality among non-elderly adults.
A repeal-and-delay plan wouldn’t just affect coverage and premiums. Rather, the withdrawal of billions of dollars poured into state governments and into subsidized coverage would amount to a sudden removal of a stimulus. Recent analyses have shown that a repeal-and-replace plan like the BCRA’s House predecessor, the American Health Care Act, would decrease total jobs by about a million, cut total state gross-domestic products by $93 billion, and curb total business output by $148 billion by 2026—losses that would be concentrated in the health industry, but felt across every sector.
But those losses are downright rosy compared with earlier projections for the 2015 repeal-and-delay plan that Obama vetoed. One January study from Commonwealth Fund and George Washington University researchers found that such a plan would erase around 3 million jobs, $1.5 trillion in gross state products, and $2.6 trillion in total business activity in the four years after its completion.
Now, all of these effects assume only the “repeal” portion of repeal-and-delay. Hypothetically, a replacement—even if it turned out to just be a revived BCRA—would offset many of the most disruptive effects, provide money for the exchanges to start running smoothly again, and provide some funding mechanisms for the poorest and sickest patients. But in the words of McConnell at his press conference Tuesday: “It’s pretty obvious that we don’t have 50 members who can agree on replacement.”
The last five months have been a blur of rushed and secret bills, backroom deals, intra-party revolts, deteriorating public opinion, and a president who waffles weekly about his most basic stances on health policy. The repeal-and-delay option hinges on the Senate being able to do exactly what they just failed to do, and every quantum of risk that they fail again would inflate premiums and slough even more people off coverage. As Murkowski stated in her decision not to back McConnell’s Plan B, “there’s enough chaos and uncertainty already, and this would just contribute to it.”
Even with objections like Murkowski’s, as long as McConnell is Senate majority leader, it seems unlikely that the prospect of Obamacare repeal will really ever go away. The margins are too thin, and opportunity will inevitably come knocking again at some point down the road. And under the most cynical interpretation, the repeal-and-delay option is an effective backup plan because it would basically create a time bomb: As the months ticked away, moderate Republicans or even Democrats would have to get on board to create a replacement plan that averts the total collapse of exchange markets and the ejection of over 30 million people into the ranks of the uninsured.
Indeed, the time-bomb approach appears to be the de facto Republican strategy, even if McConnell’s repeal-and-delay gambit falls a few votes short. On Tuesday morning, Trump outlined Plan C in the GOP arsenal: “We’ll just let Obamacare fail. We’re not going to own it.” Of course, nobody expects the White House will be a passive player in that process. The Trump administration has several tools on hand that can weaken and undermine the Obamacare exchanges and restrict eligibility for Medicaid, and it has signaled that it will use those tools as vigorously as possible.
Although it seems unlikely today, repeal remains a possibility, scorched-earth option as it may be. As McConnell knows, with a splintering party, it might be his only chance of fulfilling the pledge under which Republicans have operated for seven years now.