July 28, 2017

'It is time to move on': Senate rejects health plan in dramatic vote

Daily Briefing

    Editor's note: This story was updated at 12:20 p.m. ET

    The Senate in a dramatic turn of events early Friday morning voted 49-51 to reject a scaled-back GOP plan to repeal portions of the Affordable Care Act. Republican Sens. John McCain (Ariz.), Susan Collins (Maine), and Lisa Murkowski (Alaska), joined all 48 Democrats in rejecting the measure. The vote prompted Senate Majority Leader Mitch McConnell (R-Ky.) to call for his party to "move on" from its ACA repeal efforts, while President Trump responded by renewing his call to "let ObamaCare implode, then deal."

    Why investing in consumer loyalty is a no-regrets strategy

    Here's what we know—and don't know—about what happened last night and what may happen next.

    What did the Senate just reject?

    Senate Majority Leader Mitch McConnell (R-Ky.) late Thursday night released the highly anticipated "skinny repeal" measure, which was formally called the Health Care Freedom Act.

    The measure would have:

    • Immediately repealed the ACA's individual mandate;
    • Temporarily repealed the law's employer mandate;
    • Delayed the ACA's medical device tax until 2021;
    • Between 2018 and 2020, increased the maximum contribution limit of health savings accounts;
    • Eliminated funding for Planned Parenthood for one year;
    • Eliminated funding for the ACA's Prevention and Public Health Fund, which helps CDC supplement public health funding and respond to emergencies;
    • Added an additional $422 million in funding for community health centers for fiscal year 2017; and
    • Modified an ACA provision that allows states to waive certain requirements of the health law.

    The Congressional Budget Office last night estimated that the bill would have increased the number of uninsured Americans by about 16 million people next year, compared with current law. CBO said the bill would have raised insurance premiums by about 20 percent over the next decade, while decreasing federal budget deficits by about $179 billion over that same time period.

    The Health Care Freedom Act was an attempt from Senate Republican leaders to unite their caucus around a partial ACA repeal measure that could secure 51 votes. It came after the failure this week of procedural votes on two broader health reform measures:

    • The Better Care Reconciliation Act (BCRA), which would have fundamentally reformed Medicaid financing and repealed major portions of the ACA; and
    • The Obamacare Repeal Reconciliation Act (ORRA), which would have immediately repealed the ACA's coverage mandates and taxes but would have delay repeal of its coverage expansions by two years, with the hopes of passing a replacement plan sometime in the interim.

    GOP leaders said their goal was to advance the repeal effort to a conference committee with the House. However, McCain and Sens. Lindsey Graham (S.C.) and Ron Johnson (Wis.) on Thursday evening expressed concern that the House might ultimately pass the Health Care Freedom Act as-is, which could have happened before or after a conference committee.

    House Speaker Paul Ryan (R-Wis.) then told the senators the House would enter into a conference committee and was not interested in passing a skinny repeal measure. Ryan's assurances convinced Graham and Johnson to vote "yes" on the measure, but McCain voted no—and in dramatic fashion.

    Politico reports that senators were unsure how McCain would vote throughout Thursday. When asked by reporters at about 11 p.m. ET, McCain said he had decided how he would vote, but wouldn't explain further. "Wait for the show," he remarked.

    Democratic Minority Leader Chuck Schumer (N.Y.) said the Arizona senator had informed him of his voting plans before he came on the floor Friday morning. But the vote came as a surprise to some of McCain's GOP colleagues. Sen. Bill Cassidy (R-La.) said of McCain, "I thought he was a 'yes' and had been told he was a 'yes' when I came to the floor." Sen. Shelley Moore Capito (R-W.Va.) said, "I don't think we all knew until he actually" voted no at about 1:30 a.m. ET, to gasps in the Senate chamber.


    Ultimately, McCain—who had returned to Washington earlier this week after being diagnosed with brain cancer—explained in a statement after his vote that Ryan's "statement that the House would be 'willing' to go to conference does not ease my concern that this shell of a bill could be taken up and passed at any time."

    He added, "From the beginning, I have believed that Obamacare should be repealed and replaced with a solution that increases competition, lowers costs, and improves care for the American people. The so-called 'skinny repeal' amendment the Senate voted on today would not accomplish those goals."

    Murkowski and Collins' no votes came as less of a surprise, as they had opposed the motion to proceed, the BCRA, and the ORRA. Collins said in a statement that she was concerned about the effects of skinny repeal on premiums and market stability, and urged a bipartisan approach to health reform going forward.

    What might come next?

    After three repeal efforts were rejected in one week, Senate GOP leaders appear to have exhausted their immediate options on health reform.

    The Atlantic's Russell Berman reports that McConnell immediately after the measure's defeat scrapped plans for further health reform votes that night.

    McConnell in a floor speech following the vote said "it is time to move on." He said, "This is clearly a disappointing moment. ... I regret that our efforts were simply not enough, this time." McConnell also signaled Republicans could begin a more bipartisan effort, saying of Democrats, "Now I think it's appropriate to ask, what are their ideas? It'll be interesting to see what they suggest as the way forward."

    McCain in his statement called for a "return to the correct way of legislating," saying the Senate should "send the bill back to committee, hold hearings, receive input from both sides of aisle, heed the recommendations of nation's governors, and produce a bill that finally delivers affordable health care for the American people."

    However, President Trump shortly after the vote reiterated his calls to "let ObamaCare implode." As Axios' "Vitals" reports, Trump and HHS Secretary must make key decisions in the months ahead that could have positive or negative effects on the ACA:

    • Cost-sharing subsidies: The Trump administration earlier this month agreed to pay these subsidies, which help offset the cost of care for low-income ACA enrollees, for July, but he has not given any indication on whether the administration will continue to make future payments;
    • Enrollment outreach: Price will need to decide whether he will continue to promote ACA enrollment efforts for the next open enrollment period. The administration earlier this month terminated two contracts that supported ACA enrollment outreach efforts in 18 cities.
    • Individual mandate enforcement: IRS in February indicated it will continue accepting tax returns that do not indicate filers' health coverage status, which some observers have said could create consumer confusion.

    (Pear et al., New York Times, 7/28; Berman, The Atlantic, 7/28; Kliff, Vox, 7/28; Bresnahan et al., Politico, 7/28; Baker, Axios, 7/28; Roubein, The Hill, 7/28; CBO report, 7/28; McCain statement, 7/28; Min Kim et al., Politico, 7/28; O'Keefe, "PowerPost," Washington Post, 7/28).

    Why investing in consumer loyalty is a no-regrets strategy

    Join us on Friday, August 4 at 1 p.m. ET to learn how to generate consumer loyalty and why investing in loyalty is a no-regrets strategy regardless of business model—and no matter what happens with the ACA.

    Register for the Webconference

    X
    Cookies help us improve your website experience. By using our website, you agree to our use of cookies.