President Trump pledged during the presidential campaign to deliver legislation that "fully repeals Obamacare." But Republican leaders are doing something else: pushing a bill that leaves much of Obamacare in place. Among other deficiencies, the bill retains the Affordable Care Act's health insurance regulations.

Obamacare's regulations are the driving force behind its skyrocketing premiums and low-quality coverage. Yet the Republican bill (the American Health Care Act) would preserve them with only slight modifications. As a result, the Congressional Budget Office projects, the AHCA would increase average premiums by 20 percent above their already high levels, and leave more people uninsured than full repeal.

Why not do what they promised, then, and fully repeal Obamacare? House leaders say that since Republicans don't have a 60-vote supermajority in the Senate, they crafted a bill that can pass the Senate through the "budget reconciliation" process with a simple, 51-vote majority. Budget reconciliation is a tool for taxes and spending, and it would break Senate rules to stick regulation provisions into a reconciliation bill, GOP leadership argues.

This excuse is disingenuous, we know, because their own bill modifies some regulations. More important, GOP leaders are wrong about Senate rules.

Senate rules do allow repeal of the Obamacare regulations by a simple majority.

Obamacare's regulations are not irrelevant to federal spending nor are they merely incidental to federal spending. The regulations are, to use a budgetary term of art, "terms and conditions" of government spending, and thus fair game in a budget reconciliation bill.

Last year, for example, the Senate approved a reconciliation bill that would have eliminated funding for Obamacare's Medicaid expansion. The parliamentarian ruled the Senate could — with a simple majority — eliminate that spending, along with the terms and conditions federal law attaches to it.

Related Story: http://www.washingtonexaminer.com/article/2618092

So what makes the regulations "terms and conditions" of federal spending?

In short, the regulations are the terms and conditions of federal subsidies for health insurance.

Obamacare subsidizes premiums bought on the insurance exchanges only for "qualified health plans," which must conform to all of Obamacare's various health insurance regulations. Every regulation on qualified health plans is, therefore, a "term and condition" imposed on government spending.

The regulations also apply to health plans that are not eligible for exchange subsidies, which might seem unrelated to federal spending. Yet the purpose of applying the regulations to unsubsidized plans is to keep healthy young people from going off the exchanges to buy no-frills health plans. If healthy people fled the exchanges, then the exchanges would have a sicker customer pool, and subsidies would go up.

Every relevant authority has recognized the regulations and subsidies belong to a single, integrated program.

  • The ACA itself explains the regulations are integral to the law's overhaul of private health insurance.
  • The ACA's authors filed a Supreme Court brief explaining the law's regulations, mandates and subsidies are part of one "interdependent statutory scheme."
  • The Obama administration filed one Supreme Court brief explaining the regulations are part of an "interdependent," "interlocking," "integrated" set of measures that are "designed to function together" as "a comprehensive program," and a second brief that affirmed the regulations are an "inseverable" part of that larger program.
  • The Supreme Court found the regulations are part of an "interlocking," "intertwined" program that "would not work" without each of its component parts, and dismissed as "implausible" the idea that the regulations are independent or separable from the exchange spending.

The above is a clear and convincing argument, and I lay it out at length in this new study.

If, however, the parliamentarian isn't convinced, Senate Budget Committee Chairman Mike Enzi, R-Wyo., has a trump card:

Enzi can clarify that the regulations are terms and conditions on federal spending by establishing a budget baseline that treats the ACA how the CBO treated the Clinton health plan in 1994: as a government takeover of health insurance, with "all payments related to health insurance policies … recorded as cash flows" in the federal budget.

The CBO acknowledges this is a plausible reading of the ACA, and that the decision is Congress' to make.

When all health insurance spending is governmental, all health insurance regulations are terms and conditions of government spending. Including all U.S. insurance spending in the baseline would clarify that: (1) the ACA's regulations, mandates, and subsidies are all part of one program; (2) the regulations are terms and conditions of federal spending; and (3) repealing the regulations is budgetary in nature, because it is essential to removing those financial flows from the federal budget.

In the end, not only do Senate rules allow repeal of the ACA's regulations with just 51 votes via reconciliation, but reconciliation is the appropriate mechanism for repealing them. To claim otherwise is as senseless as saying a simple majority of the Senate could repeal all Medicare spending, but not the rules governing Medicare benefits and payment systems.

House Republican leaders are abandoning President Trump's promise of full repeal before their colleagues can even press their case with the Senate parliamentarian or the presiding officer, who makes the final ruling. Their excuses for not even trying hold less water than one of Speaker Paul Ryan's leaky buckets.

Michael F. Cannon (@mfcannon) is a former Senate leadership staffer, "ObamaCare's single most relentless antagonist" (according to The New Republic), and director of health policy studies at the libertarian Cato Institute. He is the coeditor of "Replacing ObamaCare" (Cato Institute, 2012).

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