The latest version of the Senate GOP’s bill to partially repeal and replace Obamacare was pronounced dead the evening of Monday, July 17, when Utah senator Mike Lee and Kansas senator Jerry Moran announced their opposition, bringing the number of “no” votes to at least four. In a Senate that Republicans control 52-48, the bill could lose only two GOP votes and still pass, and Kentucky’s Rand Paul and Maine’s Susan Collins had already come out against it.
Each senator gave different reasons for opposing the bill, but put them all together and the message is that the legislation failed because it is too liberal for some senators, too conservative for others, deeply unpopular among the public, and written by Senate leadership in a closed and rushed process without any public hearings.
Where do things go from here on health care? No one knows. Here are five possibilities:
1. “Repeal-and-replace” resurrection. It’s a tall order, but it’s conceivable that eventually something resembling the Better Care Reconciliation Act passes the Senate and the House and is signed into law by President Donald Trump. Collins and Paul appear certain to oppose any version of this bill, so step one to getting 50 votes involves gaining Mike Lee’s support, which doesn’t look to be all that difficult. Lee said he’d vote for the bill if it included Texas senator Ted Cruz’s “consumer freedom amendment,” which would allow insurers that sell Obamacare-compliant plans to sell plans that don’t adhere to Obamacare’s costly regulations. The bill did include a modified version of the amendment that Cruz said was good enough to win his vote but Lee found unacceptable. The policy dispute is technical and complicated (the bill required a single insurance pool instead of one high-risk pool and another for everyone else).
If that specific policy dispute can be resolved, step two would involve spending enough money on Medicaid to assuage the concerns of moderate senators. Throughout the process, conservatives have made it clear that they would be willing to tolerate more spending and even keeping some of Obamacare’s taxes on the wealthy to get regulatory relief that would re-create a real insurance market that brings down costs for middle-class Americans who don’t have employer-sponsored insurance.
Even if conservatives and moderates compromise, wild cards like Moran would still need to be won over. And any successful vote would also depend upon the return to the Senate of John McCain, who was just diagnosed with brain cancer and is undergoing treatment in Arizona.
2. “Repeal-and-delay.” Immediately after the bill failed, Senate majority leader Mitch McConnell announced that he would hold a vote on a bill passed by the Senate in 2015 that would repeal Obamacare’s taxes and spending after a two-year delay. That “repeal-and-delay” bill repealed none of Obamacare’s regulations, which conservatives correctly identify as the main problem driving up insurance costs. So if the subsidies were to vanish, it would become impossible for millions more working-class and middle-class Americans to purchase health insurance.
The idea behind this plan is that scheduling a crisis two years down the road will force Congress to act in the next year. In recent years, Congress has only acted when forced to do so by looming catastrophes, but the problem with “repeal-and-delay” is that it’s unlikely that scheduling a GOP-created health care crisis for 2019 would result in a compromise any better than the deal that just failed to address the ongoing health care crisis that was created by Democrats in 2010.
The experience of the last six months suggests “repeal-and-delay” would not compel 50 Republicans to agree on anything, and Republicans tend to fare poorly in bipartisan negotiations to avert crises (as you may recall from the debt-limit standoff of 2011, the “fiscal cliff” of 2012, and the government shutdown of 2013).
Repeal-and-delay was the original plan of GOP congressional leadership, but it was scuttled after center-right experts raised concerns that it could further destabilize health insurance markets and conservatives said it was unacceptable. “I just spoke to @realDonaldTrump and he fully supports my plan to replace Obamacare the same day we repeal it,” Kentucky senator Rand Paul tweeted on January 6.
Paul has flip-flopped on the plan and now backs repeal-and-delay, along with other conservatives in the Senate. But after six months of failed health care negotiations, “repeal-and-delay” sounds a lot more like “the dog ate my homework.” At least three moderates have come out against it, and its passage seems even less likely than repeal-and-replace’s resurrection.
3. A small bill. If repeal-and-replace and repeal-and-delay both fizzle, there’s a chance Republicans could compromise on a more modest piece of legislation. Senators Bill Cassidy of Louisiana and Lindsey Graham of South Carolina have proposed encouraging more health care experimentation among the states, essentially expanding a provision that already exists in Obamacare. Some conservative critics say this is faux federalism, because the plan would still force states to follow Obamacare’s most onerous regulations.
The editors of National Review have suggested a different kind of small bill. “Republicans seem to be able to achieve near-unity on ending the individual mandate, allowing insurers to offer discounts for younger people, protecting taxpayers from having to subsidize abortion coverage, and giving states some freedom to relax regulations. They should work for legislation that achieves these goals and includes as much Medicaid reform as 50 senators are prepared to tolerate,” read a July 18 editorial. “Republicans should not claim that such legislation would repeal and replace Obamacare, since it would not, and should make it clear that additional legislation will be needed in the future.”
4. Bipartisan bailout. On July 18, Tennessee GOP senator Lamar Alexander, chairman of the Health, Education, Labor, and Pensions Committee, issued a statement saying he would “hold hearings to continue exploring how to stabilize the individual market.” The “repeal-and-replace” bill already includes a “stability fund” (also known as a bailout) that conservatives were willing to swallow as part of a transition away from Obamacare.
But as a standalone measure, the politics of a bailout are downright ugly on the right. “Until Senate Republicans demonstrate a willingness to come together and work with their colleagues to repeal and replace Obamacare, the near-term fight is to block a bailout of this failing law,” Heritage Action’s Mike Needham said in response to Alexander’s statement. “Make no mistake, when lawmakers call for ‘bipartisan market stabilization’ they mean more taxpayer money and more regulations. That approach is unacceptable.” Even Texas senator John Cornyn, the majority whip, opposed this approach. “I personally will not be part of any bailout of insurance companies without reform,” he said on the Senate floor on July 18.
The fear of some conservatives is that such a bailout would be attached to bipartisan, must-pass legislation to fund the government. A standalone bailout is toxic enough for small-government conservatives, but it would cross a red line for pro-lifers if Democrats insisted on a new funding stream that was not subject to the Hyde Amendment, a prohibition on federal funding of elective abortion and insurance plans that cover elective abortion. Few Republicans in Congress would want to start a civil war with the pro-life movement in order to pass a bailout.
5. Nothing. Yes, nothing. It’s entirely possible that no legislation affecting Obamacare is passed by the 115th Congress and signed into law. “I think we’re probably in that position where we’ll let Obamacare fail,” President Trump said on July 18. “We’re not going to own it. I’m not going to own it. I can tell you the Republicans are not going to own it.”
Trump might be wrong about the politics—voters probably won’t let him and congressional Republicans off the hook for failing to fulfill seven years of campaign promises to repeal Obamacare. And though the leadership and rank-and-file of the GOP in Congress will bear plenty of blame for not hashing out their differences and selling their ideas, so too will the Republican president bear blame for not having a basic understanding of health care policy and for changing his opinions on matters of strategy and substance on a day-to-day basis. Trump not only failed to use the bully pulpit to persuade the American people, he actively undermined efforts to repeal Obamacare—recall Trump’s calling the House bill “mean” days after urging Congress to pass it. Still, doing nothing might be the most likely response at this point.
The law would, of course, continue to fail: As the New York Times reported on June 9, there are 45 counties where no insurers plan to offer policies on the Obamacare exchanges next year. It’s a real problem, but Jim Capretta of the American Enterprise Institute points out that “it’s a small number” of consumers in those 45 counties, and the government will “end up muscling the insurers to cover those people.” “The other problem is the places where there’s only one insurer,” Capretta told The Weekly Standard. “That’s one-third of the country or so.” So even as Republicans try to take up tax reform and other issues, they would be dogged month after month about insurers leaving the market and premiums skyrocketing for middle-class Americans.
Republicans may desperately want to move on from health care, but health care will not move on from them.
John McCormack is a senior writer at The Weekly Standard.
