If Republicans Can Confirm Kavanaugh, They Can Repeal Obamacare

So Republican lawmakers do have spines after all. Who knew? Last weekend’s confirmation of Brett Kavanaugh to the Supreme Court, notwithstanding the controversies surrounding his nomination, stemmed primarily from two sources.

First, many Republican lawmakers objected to how Democrats politicized the nomination—holding allegations of sexual assault against Kavanaugh for more than a month, then leaking them days before his confirmation.

Lawmakers defied the political controversies, protests, and Kavanaugh’s middling poll numbers, because they felt the need to deliver on a promise they made to voters. Well, if Republicans are going to go all crazy by starting to deliver on their promises, why don’t they deliver on the promise they made for the last four election cycles, by eliminating the health care law that has raised premiums for millions?

Meanwhile, Back at the Ranch

Senate Republicans’ bout of political courage in confirming Kavanaugh belies their other actions in the past several weeks. Even as most of the media generated ridiculous amounts of coverage on the Supreme Court nomination, the noise surrounding such topics as “boofing” allowed Republican lawmakers to renege on other political promises under the radar.

Case in point: The massive spending bill that Congress approved, and President Trump signed, last month. Despite funding most of the federal government, it does not include funding for a border wall. Republicans punted on that fight until after the election—ensuring they’ll never have it.

Mr. ‘Don’t Blink’ Blinked

But the piece de resistance of the spending bill had to come from the way that it fully funded all of Obamacare. Despite funding Obamacare—and breaking so many other promises to voters—only 56 Republicans in the House, and seven in the Senate, voted against the measure.

One Republican who supported rather than opposed the spending bill that broke so many Republican promises? None other than Sen. Ted Cruz. You may recall that in 2013, Cruz mounted a 21-hour speech prodding the Senate to defund Obamacare:

He pleaded with Republican lawmakers to deliver on their promise to voters, exhorting them, “Don’t blink!”

Last month, by voting for legislation that funded Obamacare, Cruz blinked. With “courage” like this, is it any wonder that Cruz faces the fight of his political life in his re-election campaign against Rep. Robert O’Rourke?

It’s no secret why Cruz faces problems, even in a ruby red state like Texas: Conservatives don’t feel particularly motivated to support his re-election. Given that Cruz said one thing about Obamacare five years ago, and acted in a completely contrary manner just before his election, their apathy is not without reason.

Do Your Job, And Keep Your Promises

For the past eight years, Republicans have promised to repeal Obamacare. They have control of Congress for at least the next three months. They could easily pass legislation undoing the measure in that time—provided they have the kind of backbone seen on display during the Kavanaugh nomination.

Some Senate Republicans may have voted for Kavanaugh not just because they support the nominee on his merits, but because they feared what voters would do to them if they did not support him. They should ponder that same dynamic when considering the fate of the health care law. And then they should get back to work, deliver on another promise to voters, and repeal Obamacare.

This post was originally published at The Federalist.

Republicans’ Spending Dilemma, In One Tweet

Most of official Washington woke up apoplectic on Sunday, when a tweet from President Trump invoked “the Swamp’s” most dreaded word: “Shutdown.”

Put aside for a moment specific questions about the wall itself—whether it will deter illegal immigration, how much to spend on it, or even whether to build it. The Trump tweet illustrates a much larger problem facing congressional Republicans: They don’t want to fight—about the wall, or about much of anything, particularly spending.

Voting for the Mandate after They Voted Against It?

Take for instance an issue I helped raise awareness of, and have helped spend the past several weeks tracking: The District of Columbia’s move to re-establish a requirement on district residents to purchase health insurance.

As I wrote last week, Sen. Ted Cruz (R-TX) offered an amendment in the Senate that would defund this mandate. The amendment resembles one that Rep. Gary Palmer (R-AL) offered in the House, and which representatives voted to add to the bill. If a successful vote on the Cruz amendment inserted the provision in the Senate version of the bill, the defunding amendment would presumably have a smooth passage to enactment.

So what’s holding it up? In a word, Republicans. According to Senate sources, Republican leaders—and Republican members of the Appropriations Committee—don’t want to vote on Cruz’s amendment. Several outside groups have stated they will key-vote in favor of the amendment, and the leadership types don’t want to vote against something that many conservative groups support.

Are Democrats Running Congress?

In short, because Democrats might object. Appropriations measures need 60 votes to break a Senate filibuster, and Democrats have said they will not vote for any bill that includes so-called “poison pill” appropriations riders. The definition of a “poison pill” of course lies in the eyes of the beholder.

Politico wrote about the spending process six weeks ago, noting that new Senate Appropriations Committee Chairman Richard Shelby (R-AL) and Ranking Member Pat Leahy (D-VT) “have resolved to work out matters privately. Both parties have agreed to hold their noses to vote for a bill that they consider imperfect, but good enough.”

That “kumbaya” dynamic has led Senate Republican leaders and appropriators to try and avoid the Cruz amendment entirely. They don’t want to vote against the amendment, because conservatives like me support it and will (rightly) point out their hypocrisy if they do. But they don’t want the amendment to pass either, because they fear that Democrats won’t vote to pass the underlying bill if it does. So they hope the amendment will die a quiet death.

Conservatives Get the Shaft—Again

At this point some leadership types might point out that it’s easy for people like me to sit on the sidelines and criticize, but that Republicans in Congress must actually govern. That point has more than a grain of truth to it.

On the other hand, “governing” for Republicans usually means “governing like Democrats.” Case in point: The sorry spectacle I described in March, wherein Republican committee chairmen—who, last I checked, won election two years ago on a platform of repealing Obamacare—begged Democrats to include a bailout of Obamacare’s exchanges in that month’s 2,200-page omnibus appropriations bill.

The chairmen in question, and many Republican leaders, feared the party will get blamed in the fall for premium increases. So they decided to “govern” by abandoning all pretense of repealing Obamacare and trying to bolster the law instead, even though their failure to repeal Obamacare is a key driver of the premium increases driving Americans crazy.

With an election on the horizon, bicameral negotiations surrounding the spending bill could get hairy in September, because two of the parties come to the table with fundamentally different perspectives. Republican congressional leaders worry about what might happen in November if they fail to govern because they stood up for conservative policies. Trump worries about what might happen if they don’t.

UPDATE: On Wednesday afternoon, the Senate voted to table the Cruz amendment blocking DC’s individual mandate. Five Republicans who voted to repeal the individual mandate in tax reform legislation last fall — Louisiana’s Bill Cassidy, Maine’s Susan Collins, Alaska’s Lisa Murkowski, Alabama’s Richard Shelby, and Utah’s Orrin Hatch — voted to table, or kill, the amendment.

Because the vote came on a motion to table, senators may attempt to argue that the vote was procedural in nature, and did not represent a change in position on the mandate. Shelby, the chair of the Appropriations Committee, said he supported the underlying policy behind the Cruz amendment, but voted not to advance the amendment because Democrats objected to its inclusion.

This post was originally published at The Federalist.

House Health Care Bills Show Misplaced Priorities

Why would House Republican leadership place the concerns of gym owners over those of pro-lifers? And why would that same leadership embrace a policy suggestion from the liberal group Families USA that could entrench Obamacare while raising premiums for young people?

While the House will consider legislation this week providing tax breaks to individuals who buy gym memberships, the House has yet to consider legislation cutting off tax breaks for abortion this Congress. On the latter front, an expansion of “copper” catastrophic insurance plans would effectively eliminate a regulatory provision that has lowered premiums for young Americans—another misplaced priority that could cause consternation for some conservatives.

What’s Inside Some Health Savings Account Legislation

However, Section 8 of one of the bills would allow for a $500 deduction for gym memberships or instruction, and a $250 deduction for safety equipment, as a qualified medical expense. The amounts would double for joint returns.

While just about everyone supports increasing Americans’ levels of physical activity, the provision seems questionable at best. The tax reform bill enacted not eight months ago attempted to eliminate these kinds of deductions from the tax code, creating a simpler, fairer process. This proposal would turn right around and add more complexity, by requiring the IRS to issue new regulations “to determine…what does not constitute a qualified physical activity, including golf, hunting, sailing, horseback riding, and other similar activities.”

The federal government already tries to do too many things, and has too great a role in Americans’ lives as it is. Do we really need the IRS determining what is, and is not, a “qualified physical activity?”

As for Abortion and HSAs

In fact, some pro-life leaders have opposed provisions that would allow individuals to use HSA dollars to fund insurance premiums, because pro-lifers want to prohibit those funds from being used to pay for abortion coverage (or abortions period). But the House has yet to vote this Congress on limiting abortion as a qualified medical expense.

The pro-life legislation that the House voted on in January 2017, H.R. 7, sponsored by Rep. Chris Smith (R-NJ), prohibited taxpayer dollars from funding abortion in all cases, including Obamacare exchange plans. However, it did not address preferences in the tax code relating to abortion, such as the qualified medical expense deduction.

It seems that the House Ways and Means Committee, which marked up the bills in question, cares more about satisfying lobbyists than responding to their large pro-life constituency. From gym owners to device makers—who have lobbied intently for the Obamacare device tax repeal that the House will also consider this week—the series of health care bills contains myriad provisions, some good and some not-so-good, advocated by business lobbyists. Unfortunately, pro-life advocates have yet to receive similar consideration.

Unintended Consequences of Expanding ‘Copper’ Plans

However, because only certain individuals currently qualify for “copper” plans, insurers can adjust their premiums downward accordingly. Section 1312 of Obamacare contains a single risk pool requirement, meaning that insurers must rate all their products in a given state as a single book of business in determining premium rates. But a rule the Obama administration released in 2013 included a special exception to that provision for “copper” plans. These catastrophic plans may adjust their rates to reflect “the expected impact of the specific eligibility categories.”

In other words, because primarily young individuals enroll in catastrophic plans, insurers can at present lower their premiums to reflect that fact. However, by making everyone eligible for “copper” coverage, the House bill would effectively eliminate this adjustment, thus raising premiums for the 18- to 29-year-old individuals enrolled in the plans.

Effects of the ‘Copper’ Change

Catastrophic plans have not proven particularly popular on the exchange market, with only 1 percent of enrollees purchasing them as of earlier this year. However, that lack of popularity arises because individuals receiving premium subsidies (i.e., most of the people buying coverage directly from the exchange) cannot apply those subsidies to “copper” plans.

Paradoxical as it may sound, expanding these popular plans to all age groups could actually curb their appeal. While a recent eHealth analysis claims that an expansion of “copper” plans could save near-seniors (i.e., those aged 55-64) an average of $4,608 per year, it likely will not do so. eHealth’s analysis compares the current 41 percent differential between “copper” premiums and bronze premiums to arrive at its figure.

However, as noted above, the current “copper” rates assume enrollment primarily by individuals under 30. eHealth’s analysis thus compares rates for a market of individuals aged 18-29 to a market of individuals aged 18-64—which explains the 41-percentage point difference in premiums. But if “copper” plans expand to all ages, that premium differential will narrow—and premiums for the 18-29 population will likely increase.

Single Risk Pool Bolsters Obamacare

More to the point: The “copper” plan provision includes language reinforcing Obamacare’s single risk pool. It also undermines the intent of last year’s Consumer Freedom Amendment, offered in the Senate by Sen. Ted Cruz (R-TX), which would have allowed for the sale of non-compliant plans alongside Obamacare-compliant plans.

The difference on this one provision speaks to a broader philosophical debate. Moderates want to support Obamacare’s exchanges by passing “stability” legislation and expanding subsidies. So does Families USA, which in December 2012 submitted a comment to the Department of Health and Human Services opposing the rate adjustment provision for catastrophic plans, because it could tend to segment the market.

By contrast, conservatives want to offer people lifeboats away from the exchanges—options such as short-term insurance plans, association health plans, and the like. On that front, this week’s legislation does not advance the ball, and expanding “copper” plans could on balance represent a step back.

Thankfully, House leadership did not end up attaching attach an insurer bailout to this week’s HSA bills, after early rumblings in that direction. But the fact that conservatives even need to have these discussions speak to the ways in which many House Republicans want to strengthen Obamacare rather than repealing it.

This post was originally published at The Federalist.

What Liberals Won’t Tell You About Pre-Existing Conditions

The Kaiser Family Foundation released its monthly tracking survey on Wednesday, with results designed to give liberals a big boost: “The majority of people in a new poll say it’s important to them that Obamacare’s protections for people with pre-existing conditions aren’t endangered.”

Unfortunately, that doesn’t tell the entire story. Voters do like the idea of “protections for people with pre-existing conditions” in the abstract. But when pressed, they express significant qualms about the very real trade-offs.

Moreover, large majorities of voters said it was “very important” to retain provisions “prohibiting health insurance companies from denying coverage because of a person’s medical history” (76 percent) and “charging sick people more” (72 percent). Smaller but still sizable majorities of Republicans (58 percent in both cases) supported each issue.

What the Poll Did Not Ask

The poll looked at views about pre-existing conditions in a vacuum and did not attempt to examine trade-offs of the policy, or whether individuals valued one policy over another. For instance, among Republicans, repealing Obamacare proved more popular than preserving the pre-existing condition provisions.

Nine percent of Republicans considered Obamacare repeal the “single most important factor” in their vote, with another 49 percent calling it a “very important factor.” Compared to that combined 58 percent support, pre-existing condition provisions won 51 percent support, with 8 percent calling them the most important factor, and 43 percent calling them very important.

Kaiser also did not ask any questions about the trade-offs associated with the pre-existing condition provisions, and whether those trade-offs would soften voters’ support for them, even though it has done so on other issues in the past. Last July, a Kaiser poll demonstrated how telling people who initially support a single-payer system that such a change could lead to higher taxes or greater government control caused support for single-payer to drop by roughly 20 percentage points:

Thankfully, last year the Cato Institute conducted a survey that did examine the trade-offs of the pre-existing condition provisions, with revealing results:

  • Initially, voters approved of “requir[ing] insurance companies [to] cover anyone who applies for health insurance, including those who have a pre-existing medical condition” by a whopping 77-20 percent margin.
  • But when asked if they would approve of such a requirement “if it caused the cost of your health insurance to go up,” voters disapproved of this provision by a 35-60 percent margin. If the pre-existing condition provisions raised premiums, support declined by 42 percentage points, and opposition rose by 40 percentage points.
  • Voters likewise initially approved of the Obamacare provision “that prohibits health insurance companies from charging some customers higher premiums based on pre-existing conditions” by a 63-33 percent margin.
  • Here again, however, if charging all individuals the same rates meant “the cost of your health insurance would go up,” support dropped by 24 points (from 63 percent to 39 percent), while opposition rose by 22 points (from 33 percent to 55 percent). Opposition also rose dramatically if voters thought the pre-existing condition provisions would cause taxes to rise, or the quality of care provided to decrease.

Is This Merely Biased Polling?

I asked Kaiser why they included these types of “malleability” questions regarding single-payer but not pre-existing conditions. Ashley Kirzinger, a Kaiser researcher who worked on the poll, said they were gauging general public responses on the issue. She said Kaiser might study the trade-offs associated with the pre-existing condition policy in the future, but didn’t definitively commit to doing so.

That said, a conservative might highlight Kaiser’s liberal ideology as another possible explanation why they might not ask voters whether they would support Obamacare’s pre-existing condition provisions despite costly trade-offs. For instance, the organization has consistently used the phrase “Affordable Care Act” rather than “Obamacare” to describe the 2010 health care law—and as even a supporter of the law like Jimmy Kimmel found out, the two terms prompt sharply different reactions.

Here’s the Bottom Line

Conservatives have a compelling case to make on the harm that Obamacare’s pre-existing condition provisions have wrought—if they have the courage to make it. Thankfully, politicians like Sen. Ted Cruz (R-TX) are doing so, and in the unlikeliest of places: a pickup charity basketball game with Jimmy Kimmel.

Conservatives do have other alternatives to Obamacare’s premium-raising requirements that address individuals with pre-existing conditions. For instance, they could revive and reform high-risk pools in place prior to the law. The Heritage Foundation last year proposed regulatory changes to provide continuity of coverage for people with pre-existing conditions. While the Heritage proposal has its flaws, it would likely work better than Obamacare currently does, thereby lowering premiums in the process.

But to advance these other proposals, conservatives must first make the argument that the status quo on pre-existing conditions amounts to a tax increase on millions of Americans who buy individual health insurance. They have the facts on their side—and Kaiser’s incomplete survey notwithstanding, those facts may bring the American people to their side as well.

This post was originally published at The Federalist.

24 New Federal Requirements Added to the Graham-Cassidy Bill

Last week, I outlined how a white paper Sen. Bill Cassidy (R-LA) released essentially advocated for Obamacare on steroids. That plan would keep the law’s most expensive (and onerous) federal insurance requirements, while calling for more taxpayer dollars to make that expensive coverage more “affordable.”

Unfortunately, Cassidy also would extend this highly regulatory approach beyond mere white papers and into legislation. A recently disclosed copy of a revised Graham-Cassidy bill—originally developed by Cassidy and Sen. Lindsey Graham (R-SC) last fall—imposes two dozen new requirements on states. These requirements would undermine the bill’s supposed goal of “state flexibility,” and could lead to a regime more onerous and expensive than Obamacare itself.

18 New ‘Adequate and Affordable’ Coverage Rules

Specifically, that coverage must:

  • Include four categories of basic services defined in the State Children’s Health Insurance Program (SCHIP) statute:
    • Inpatient and outpatient hospital services;
    • Physicians’ surgical and medical services;
    • Laboratory and X-ray services, and
    • Well-baby and well-child care, including age-appropriate immunizations;
  • Include three categories of additional services also defined in the SCHIP statute:
    • Coverage of prescription drugs;
    • Vision services; and
    • Hearing services;
  • Include two other categories of services as defined by Obamacare:
    • Mental health and substance use disorder services, including behavioral health treatment; and
    • Rehabilitative and habilitative services and devices;
  • Comply with actuarial value standards set by the SCHIP statute:
    • Cover at least 70 percent of estimated health expenses for the average consumer; and
  • Comply with requirements included in eight separate sections of the Public Health Service Act, as amended by Obamacare:
    • Section 2701—Rating premiums only based on age (with older applicants charged no more than three times younger applicants), family size, geography, and tobacco use;
    • Section 2702—Required acceptance for every individual or employer who applies for coverage (i.e., guaranteed issue);
    • Section 2703—Guaranteed renewability of coverage;
    • Section 2704—Prohibition on pre-existing condition exclusions;
    • Section 2705—Prohibition on discriminating against individuals based on health status;
    • Section 2708—Prohibition on excessive waiting periods;
    • Section 2711—Prohibition on annual or lifetime limits; and
    • Section 2713—Requiring first-dollar coverage of preventive services without cost-sharing (i.e., deductibles and co-payments).

As noted above, “adequate and affordable health insurance coverage” would include many of Obamacare’s insurance requirements, and in at least one way would exceed them. Whereas Section 1302(d) of Obamacare requires selling insurance with an actuarial value—that is, the percentage of medical expenses paid for the average individual—of at least 60 percent, the revised Graham-Cassidy would require “adequate and affordable” coverage with an actuarial value of at least 70 percent.

If asked, Graham and Cassidy might state that these requirements would only apply to a certain subset of the population. After all, the revised bill text indicates that each state “shall ensure access to adequate and affordable health insurance coverage (as defined in clause (ii))”—the clause referring to the 18 separate requirements listed above—“for [high-risk individuals].” The bill lists the brackets in the original, which might indicate that Cassidy’s office intends to apply these 18 separate coverage requirements only to plans that high-risk persons purchase.

Thankfully, the new draft removes the “population adjustment factor” allowing CMS to rewrite the block grant formula unilaterally. But even as it took away CMS’ power to alter the funding formula, new language on page 15 of the revised draft allows CMS to cancel states’ block grant funds for “substantial noncompliance.” That provision, coupled with the revised bill’s lack of definition regarding “affordable” coverage and “high-risk individual” provides a future Democratic administration with two clear ways to hijack the block grant program.

For instance, a new administration could define “high-risk individual” so broadly that it would apply to virtually all Americans, subjecting them to the 18 costly coverage requirements. A new administration could also define “affordable” in such a manner—for instance, premiums may not exceed 5 percent of an individual’s income—that states would have to subsidize insurance with sizable amounts of state funds, in addition to the federal dollars included in the block grant. Any state failing to comply with these edicts could see its entire block grant yanked for “substantial noncompliance” with the bureaucratically imposed guidelines.

It seems paradoxical to assert that a bill can be both too prescriptive, imposing far too many requirements on states that undermine the supposed goal of “state flexibility,” and too vague, giving vast amounts of authority to federal bureaucrats. Yet somehow the section on “adequate and affordable health coverage” manages to do both.

Two New Required Uses of Block-Grant Funds

Supporters of the bill would argue that these supposed “guardrails” will prevent states from subsidizing Medicaid coverage, or creating some other government-run health program. But as I noted last week, Obamacare has its own “guardrails” regarding state waivers, which undermine any attempt to deregulate insurance markets.

By adding these new “guardrails,” Graham-Cassidy would essentially replicate Obamacare, albeit with slightly different policy objectives: “The Cassidy plan would give states the ‘flexibility’ to do what Bill Cassidy wants them to do, and only what Bill Cassidy wants them to do. That isn’t flexibility at all.”

Block Grant Reductions with Multiple Risk Pools

On Page 31, the bill includes new language requiring a reduction in block-grant funds, by a percentage not specified, for states electing to create multiple risk pools. Under current law, Section 1312(c) of Obamacare requires insurers to place all individual insurance market enrollees—whether they purchase coverage through the exchange or not—in a single risk pool.

If a state elects to choose multiple risk pools and uses a “substantial portion” of its block grant to subsidize insurance with an actuarial value of under 50 percent, then the state would see an unspecified reduction in its block grant. This language contains many of the flaws of the other provisions described above: It nowhere defines what comprises a “substantial portion” of the block grant, and penalizes states that may choose to create multiple risk pools and subsidize only catastrophic insurance coverage, thus belying Graham-Cassidy’s promise of “state flexibility.”

3 New Requirements for State Waivers

The revised Graham-Cassidy text moves and alters language regarding state waivers of Obamacare’s federal insurance requirements, and in so doing makes three substantive changes. (The original language started in the middle of page 143 of the bill; the new language begins on the top of page 42 of the revised bill.)

First, and perhaps most disturbingly, the revised bill requires the Department of Health and Human Services to waive Obamacare’s insurance requirements for a state only if “such state establishes an equivalent requirement applicable to such coverage in such state.” Taken literally, this provision could mean that states could “opt-out” of Obamacare’s federal requirements if and only if they enshrine those exact same requirements in state law—rendering any supposed “flexibility” under Graham-Cassidy completely nonexistent.

Graham and Cassidy may not have meant to craft language with such a literal interpretation. They may mean to say, for instance, that a state can waive out of Obamacare’s age-rating requirements (which prohibit insurers from charging older people more than three times what they charge younger people) if they establish a more permissive regime—for instance, five-to-one age rating—on the state level.

But taken literally, that’s not what the current bill text says. That vague language raises serious questions about the authors’ intent, and why they chose such unclear, and arguably sloppy, bill language.

Second, the section imposes two new requirements on states selecting multiple risk pools. As noted above, those states would have to comply with the 18 new requirements regarding “adequate and affordable” health coverage, and states creating multiple risk pools could see their block grant reduced as a result.

In addition, however, states must also guarantee that insurers offering coverage in one risk pool offer coverage in all of them. Moreover, premiums charged “by a health insurance issuer for the same health coverage offered in different risk pools in the state [may] not vary by more than 3 to 1.”

The first requirement echoes the Consumer Freedom Amendment offered by Sen. Ted Cruz (R-TX) last year. That amendment allowed insurers to offer plans that did not comply with Obamacare’s requirements, so long as they continued to offer one Obamacare-compliant plan. The second requirement would effectively limit the extent to which insurers could charge individuals more on the basis of pre-existing conditions or health status.

Two Dozen (More) Reasons for State Concern

Both individually and collectively, these two dozen new requirements inserted into the most recent version of Graham-Cassidy present problems for conservatives. The myriad requirements would sharply limit the bill’s ability to deliver lower premiums to consumers—one major goal of “repeal-and-replace” legislation.

More broadly, though, the revised bill drifts further away from any semblance of conservative objectives. While Graham-Cassidy purports to provide more flexibility to states, the revised bill would instead ensnare them in numerous requirements that would impede any attempt at innovation.

Like the proverbial Lilliputians who attempted to tie down Gulliver, the new bill looks to rob states of their ability to manage their own insurance markets and lower premiums for residents, one federal requirement at a time.

This post was originally published at The Federalist.

The Binary Choice Behind a “Skinny” Health Care Bill

Are you for The Swamp—or are you against it?

It’s really that simple. Text of the supposed “skinny” bill—or the “lowest-common denominator” approach, if one prefers—has not yet been released. But based on press reports, it appears the legislation will repeal the individual and employer mandate penalties, along with the medical device tax, and little else, so the House and Senate can set up a conference committee to re-write the bill—if the House does not decide to pass this “skinny” bill outright.

  • It will embolden Senate leadership to keep bullying rank-and-file members on future pieces of legislation, pulling bait-and-switch moves at the last minute and daring members to vote no;
  • It will move the health-care debate from an open Senate floor process into a conference committee, where after one token public meeting most legislative work will occur behind closed doors;
  • It will concede that the “world’s greatest deliberative body” cannot deliberate as an institution, and instead empower unelected leadership staff in a secretive process to cobble together a new bill that can pass both chambers;
  • It will continue a process that Republican staffers themselves have described as “making it rain” on moderate senators through various backroom deals and spending sprees—bringing parlance heretofore used in strip clubs to the U.S. Congress;
  • It will raise premiums an estimated 20 percent, by eliminating the individual mandate penalty, but leaving all of Obamacare’s regulations intact;
  • It will all-but-guarantee a future Obamacare bailout, destabilizing insurance markets such that carriers will come running to Congress demanding corporate welfare payments to keep offering exchange coverage; and
  • It will prioritize K Street lobbyists who have fought for years to repeal the medical device tax, virtually guaranteeing that provision will remain in the final legislation, while raising premiums on hard-working American families.

If senators support the above scenarios, then they should vote for the bill. If not, perhaps they should consider another course.

Blast from the Past

Conservatives have seen these games played before—and rejected them. In 2015, House Republican leaders initially offered a bill eerily similar to the rumored “skinny” legislation. That bill repealed the individual and employer mandates, the medical device tax, the “Cadillac tax,” the Obamacare prevention “slush fund,” and a few other ancillary provisions. Conservative groups could have supported it—just to keep the process moving, and continue the momentum for a broader repeal—as leadership is asking them to do right now. They did not because:

The bill would not restore Americans’ health care freedom because it leaves the main pillars of Obamacare in place, nor would it actually defund abortion giant Planned Parenthood. This bill violates an explicit promise made in the budget, which ‘affirm[ed] the use of reconciliation for the sole purpose of repealing the President’s job-killing health care law.’

That statement comes from Heritage Action, which key-voted against passage of the “skinny” repeal bill in 2015. Likewise, in the fall of 2015 conservative senators Mike Lee (R-UT), Marco Rubio (R-FL), and Ted Cruz (R-TX) said publicly they could not support what they viewed as an insufficient attempt at repeal:

On Friday the House of Representatives is set to vote on a reconciliation bill that repeals only parts of Obamacare. This simply isn’t good enough. Each of us campaigned on a promise to fully repeal Obamacare and a reconciliation bill is the best way to send such legislation to President Obama’s desk. If this bill cannot be amended so that it fully repeals Obamacare pursuant to Senate rules, we cannot support this bill. With millions of Americans now getting health premium increase notices in the mail, we owe our constituents nothing less.

The bill does not even touch Obamacare’s main two entitlement expansions: The Medicaid expansion and the Exchange subsidies. The bill leaves all of Obamacare’s new insurance rules and regulations in place. It also leaves many of Obamacare’s taxes in place….

The Obamacare repeal movement has been successful in the last 5 years in keeping full repeal intact. It has recognized that it will be much easier to repeal Obamacare as a whole if all of the mandates and entitlement expansions are repealed at once, since we know that the law is vastly unpopular when taken as a whole. The threat is that ‘repeal’ is defined-down to simply mean repealing a couple high-profile provisions, while allowing the main pillars of the law to continue untouched. This package threatens that very outcome: defining down ‘full repeal’ and jeopardizing the entire repeal effort. [Emphasis mine.]

Need for Consistency

In the past several days, conservatives have attacked Senate moderates—rightly—for flip-flopping on a full repeal of Obamacare, voting for it in 2015 but opposing it now. Those who face a similar situation from the Right—that is, those who opposed a “skinny” bill two years ago—should not fall into the same trap as those from the center. On both policy and process, conservatives should reject the minimalist approach floated by leadership, and continue working to repeal Obamacare.

This post was originally published in The Federalist.

What You Need to Know about “Vote-A-Rama”

It’s not a carnival ride—although it might prove even more adventurous. The Senate’s consideration of health-care legislation will soon result in a grueling series of votes dubbed “vote-a-rama.”

After 20 hours of debate on the budget reconciliation measure, equally divided between the majority and minority parties, the Senate will complete consideration of all pending amendments, with the process’ conclusion typically determined when senators exhaust all the amendments they wish to offer—not to mention themselves.

1. It’s Physically Demanding

The “vote-a-rama” process during consideration of the 2010 reconciliation bill that “fixed” Obamacare provides an example. On Wednesday, March 24, senators began voting on amendments at 5:32 PM. Nearly nine hours later, at 2:17 on the morning of Thursday, March 25, senators had completed votes on 29 amendments. The Senate then took a brief break, re-convened at 9:45 the same morning, and disposed of a further 12 amendments over an additional four-plus hours, with a vote on final passage at 2 PM on March 25.

For 20-something or 30-something staffers—let alone senators several times their age—this lengthy process can prove grueling, with long hours, late nights, lack of sleep, and little food (or bad food) the norm.

2. It’s Mentally Confusing

Between votes on amendments, senators usually allow for brief one-minute speeches by the amendment’s proponent and an opponent (generally the majority or minority floor manager of the bill). However, as Senate procedural expert James Wallner notes, that habit has derived from custom and unanimous consent, not any formal rule. If any senator objects to the brief “well speeches” as part of “vote-a-rama,” then the Senate will vote on amendments without any debate or a summary of what the amendment does.

3. It’s Hard to Pass Amendments with a Simple Majority…

As Wallner noted in an article earlier this week, the Senate’s rules essentially give preferential treatment to the underlying reconciliation bill, making it difficult to craft amendments that can pass with a simple (i.e., 50-vote) majority. The amendment must be germane (i.e., relevant) to the underlying bill, and cannot increase the deficit.

Moreover, to pass with a simple majority, an amendment must also comply with the six-part “Byrd rule” test. For instance, an amendment may not have only an incidental fiscal impact, make programmatic changes to Title II of the Social Security Act, or exceed the jurisdiction of the committees who received the reconciliation instructions (in this case, the Senate Finance and Health, Education, Labor, and Pensions committees). Other than simple motions striking particular provisions, amendments will face a difficult time running the procedural gauntlet necessary to pass on a 50-vote threshold.

4. …But It’s Easy to Get Amendment Votes

Even if an amendment does not comply with the budget reconciliation rules, senators can still offer a motion to waive those rules. The motion to waive requires the approval of three-fifths of senators sworn (i.e., 60 votes), which often does not materialize, but the motion to waive provides a way to get senators on the record on a specific issue. Many votes in a “vote-a-rama” series consist of a “motion to waive all applicable budgetary discipline”—i.e., the “Byrd rule” and other restrictions that make passing an amendment with a simple majority difficult.

5. It Will Result in Messaging Amendments

(b) Prohibiting Coverage of Certain Prescription Drugs—

(1) In general.–Health programs administered by the Federal Government and American Health Benefit Exchanges (as described in section 1311 of the Patient Protection and Affordable Care Act) shall not provide coverage or reimbursement for—

(A) prescription drugs to treat erectile dysfunction for individuals convicted of child molestation, rape, or other forms of sexual assault;

The “No Viagra for Sex Offenders” amendment drew no small amount of attention at the time, and led to political ads being run against the Democrats who voted against it (as some predicted prior to the amendment vote).

Democrats will almost certainly offer similar messaging amendments this year, including amendments unrelated to the bill, or even health care. They may offer amendments regarding the Russia investigation—those would likely be subject to a 60-vote threshold, as foreign policy is not germane to a budget reconciliation bill, but if Democrats wish to get Republicans on record, any vote will do.

Doubtless Democrats will offer amendments related to Donald Trump’s taxes—the reconciliation bill is in the jurisdiction of the Finance Committee, so these amendments could theoretically prove germane, but amendments specifically targeting the president (i.e., making policy, with only an incidental fiscal impact) could violate the “Byrd rule,” making them subject to a 60-vote threshold. For Democratic political consultants, the possibilities are virtually endless.

6. It May Lead to Chicanery—and ‘Strategery’

While opposing reimportation on the merits, some Republicans supported these particular amendments because they wanted to break up the “rock-solid deal” between Democrats and Big Pharma—whereby pharma agreed to support Obamacare in exchange for a promise from Democrats not to support reimportation of prescription drugs.

As it happened, Democrats spent an entire week—from December 8 through December 15, 2009—without floor votes on amendments to Obamacare. The delay—effectively, Democrats filibustering their own bill—came in part because party leaders could not persuade fellow Democrats to vote against the reimportation amendment—and could not afford to allow the amendment to pass.

One can expect similar gamesmanship by the Democratic minority this time around, as evidenced by their tactical decision to abstain from voting on Tuesday’s motion to proceed to the bill until Republican senators mustered a majority solely from within their own ranks. If only three Republicans defect on an amendment, Democrats could have the power to play a decisive role in that amendment’s outcome. It’s an open question how they will do so.

For instance, will some or all of the 12 Democrats who voted against reimportation earlier this year—during January’s “vote-a-rama,” when the Senate passed the budget enabling the current reconciliation process—switch their votes so the amendment will pass, causing Republicans heartburn with the pharmaceutical lobby? When and how will Democrats use other tactical voting to gum up the process for Republicans? The answers range from possible to likely, but it remains to be seen exactly how the process will play out.

7. It Will Inflict Political Pain

Consider for instance a flashpoint in the reconciliation bill: Whether to defund Planned Parenthood. Two Republican senators, Susan Collins and Lisa Murkowski, have already stated they oppose defunding the organization. If one more Republican defects, Democrats would likely have the votes to strip the defunding provision. (While Democratic Sen. Joe Manchin previously supported defunding Planned Parenthood two years ago, in the immediate aftermath of sting videos featuring organization leaders, he has since reversed his position, and will presumably vote with all Democrats to strip the provision.)

To put it another way: Sen. Dean Heller (R-NV) may not just have to be the 50th vote supporting the underlying bill, he may also have to provide the 50th vote to keep the Planned Parenthood defunding provision in the legislation. Will Heller vote to defund the nation’s largest abortion provider—and what will happen to the bill if he, and the Senate as a whole, votes to strip the provision out? Senate leaders will face several of these white-knuckle amendment dramas during “vote-a-rama,” any one of which could jeopardize the entire legislation.

8. It Could Unravel the Entire Bill

Ultimately, with no agreement among Republicans to preserve the underlying bill text, and no clear roadmap on how to proceed, “vote-a-rama” could resemble pulling on the proverbial thread—one good tug and the whole thing unravels. What if Heller ends up helping to strip out Planned Parenthood defunding—and conservatives respond by blocking more funding for Medicaid expansion states? What if moderates vote to strip the “consumer freedom” amendment offered by Sen. Ted Cruz (T-TX), and conservatives retaliate by taking out the “side deals” included to assuage moderates’ concerns?

At the end of “vote-a-rama,” senators could be left with an incoherent policy mess, legislation that no one would readily support. It’s the big potential downside of the freewheeling amendment strategy—but a chance that McConnell apparently feels he has no other choice but to take.

9. It’s Why Senate Leadership Is Talking about a Conference with the House

In recent days, Senate Majority Whip John Cornyn (R-TX) and others have floated the idea that, rather than having the House pass the Senate’s bill whole, sending it straight to the White House, members may instead want to have a House-Senate conference to resolve differences between the two chambers. Some have gone so far as to propose the Senate passing a “skinny” bill—repeal of the individual and employer mandates, along with the medical device tax—as a placeholder to get the reconciliation measure to a conference committee.

This strategy would have one beneficial outcome for the Senate’s Republican leadership: By allowing congressional leaders to re-write the bill in conference, it would save them from having to abide by the results of “vote-a-rama.” If, for instance, senators vote to strip out Planned Parenthood defunding, or to add in reimportation language, congressional leaders could re-write the bill in conference to negate the effects of those votes—presenting a new measure to both chambers with a binary choice to approve the bill or not. (In other words, rather than a “wrap-around bait-and-switch” on the Senate floor, senators could instead face a bait-and-switch in conference.)

That leadership has mooted a conference committee speaks to the nature of the “vote-a-rama” ahead. Despite the complaints on both ends of Pennsylvania Avenue about the lengthy nature of the health-care process, Senate leaders are now looking to extend the process further via a House-Senate conference—because they may need to regain control of the legislation after a wild and unpredictable debate on the Senate floor.

This post was originally published at The Federalist.

Why the Motion to Proceed on an Obamacare Bill Is a Sucker’s Bet

In trying to win support for their Obamacare “repeal-and-replace” bill, Republican Senate leaders are making a process argument to their fellow senators: We know you don’t like the bill, but work to mend it, rather than ending the process. As Sen. John Thune (R-SD), the chairman of the Senate Republican Conference, argued, “We gotta get on the bill.…If we don’t at least get on the bill, we’re never going to know.”

It’s a typical leadership argument: The promised land is only one bad vote away, not two bad votes, not ten bad votes, only one bad vote away. (Until the next bad vote crops up.) But to skeptics of the bill—whether moderate or conservative—that argument should sound like a sucker’s bet.

Without a clear vision of the final legislation and an agreement from 50 Republican senators to preserve that vision on the Senate floor regardless of the amendments offered—both things that Senate Majority Whip John Cornyn (R-TX) last week admitted Republicans do not have—proceeding to the bill will result in a policy morass that could make the confusing events of the past week look tame by comparison.

As things stand now, a successful motion to proceed will result in an amendment process under which various provisions of the bill get struck—due to guidance from the parliamentarian, dissension within the Republican conference, or both. Then, a last-minute substitute amendment from Majority Leader McConnell (R-KY) will attempt to win over or buy off votes (or both), with the hope that he can dare enough Republicans not to kill the legislation just before the finish line. Here are the likely ways the bill could change—and not for the better.

The ‘Byrd Bath Bloodbath’

As I have previously written, the prior versions of the Senate bill had not gone through the “Byrd bath” testing which provisions comply with the Senate’s “Byrd rule” for budget reconciliation. Late last Friday, the Budget Committee minority staff released a list of provisions that could get stricken from the bill for not complying with the “Byrd rule,” including pro-life protections ensuring no taxpayer funding of abortion, or plans that cover abortion; funding for cost-sharing subsidies; a prohibition on Medicaid funding to certain entities, including Planned Parenthood; and a provision imposing waiting periods on individuals lacking continuous health coverage.

Multiple sources indicate that the list produced by Budget Committee Democrats comprised preliminary guidance on a prior version of the legislation. Therefore, that list should not be considered definitive—that all the enumerated provisions will get stricken.

Regardless of the specifics, the “Byrd bath” will doubtless make it more difficult for Republicans to present a coherent policy vision through budget reconciliation legislation, meaning the bill could change significantly from its introduced version on procedural grounds alone.

Death by Amendments

In calling for Republicans to vote to begin debate on the bill, Sen. Lamar Alexander (R-TN), a close McConnell ally, has argued that senators will “have a virtually unlimited opportunity…on the floor to make amendments to the bill and try to improve it.”

Alexander’s key phrase is “try to,” because the numbers are strongly stacked against Republicans wishing to offer amendments. If three of 52 Senate Republicans—only 5.8 percent of the Republican conference—defect on an amendment vote, the amendment sponsor will have to rely on Democrats to approve the amendment. And why would Democrats vote for any amendment that might help Republicans pass an Obamacare “repeal” bill?

The ‘Wraparound Bait-and-Switch’

As Politico notes, the myriad amendment votes don’t represent the end of the process—they’re merely the beginning: “At some point, [Senator] McConnell will introduce a substitute that will represent the Senate’s draft bill. It may be different than what is introduced…and could be subject to amendment on the Senate floor next week. The bill, in other words, will be a work in progress until the final vote.”

That’s exactly what happened the first time the Senate considered Obamacare legislation under reconciliation, in 2015. At the end of the process, McConnell laid down a “wrap-around” amendment—essentially, a whole new version of the bill replacing the prior substitute. Reports suggest McConnell could well do the same thing this time round: introduce a new bill just prior to the vote on final passage, then dare recalcitrant Republicans to vote against it.

Conservatives in particular should fear the “wrap-around,” for the new “goodies” potentially lurking in it. With McConnell having roughly $200 billion in taxpayer funds to distribute in the form of “candy” to members, and staff brazenly telling reporters they plan on “making it rain” on moderates by including additional cash for home-state projects, the “wrap-around” could well include all sorts of new last-minute spending intended to buy votes, and not enough time to scrutinize its contents. (Will we have to pass the bill to find out what’s in it?)

Willing Disbelief

If the Senate votes to proceed to the bill and McConnell’s office turns into a trading floor, with staff “making it rain” taxpayer funds just like they promised, senators will claim themselves “Shocked—shocked!” that the process took an ugly turn.

They shouldn’t be. The signs are as plain as day. If senators have objections to the bill now, they should vote down the motion to proceed, for the bill—likely on substance, and certainly on process—isn’t going to get much better, and almost assuredly will get worse.

This post was originally published at The Federalist.

A Status Update on Repeal

With Congress heading towards its first recess at week’s end, it’s time to summarize where things stand on one of Republicans’ top objectives—repealing Obamacare—and might be headed next. While those who want further details should read the entire article, the lengthy analysis below makes three main points:

  1. Congress faces far too many logistical obstacles—the mechanics of drafting bill text, procedural challenges in the Senate, budgetary scoring concerns, and political and policy disagreements—to pass a comprehensive “repeal-and-replace” bill by late March, or indeed any time before summer;
  2. Congressional leaders and President Trump face numerous pressures—both to enact other key items on their agenda, and from conservatives anxious to repeal Obamacare immediately, if not sooner—that will prevent them from spending the entire spring and summer focused primarily on Obamacare; therefore
  3. Congressional leaders will need to pare back their aspirations for a comprehensive “repeal-and-replace” bill, slim down the legislation to include repeal and any pieces of “replace” that can pass easily and swiftly with broad Republican support, and work to enact other elements of their “replace” agenda in subsequent legislation.

What Has Happened In the Last Month

Before the New Year, congressional leaders had endorsed a strategy of repealing Obamacare via special budget reconciliation procedures, using legislation that passed Congress (but President Obama vetoed) in late 2015 and early 2016 as a model. Subsequent efforts would focus on crafting an alternative to the law, whose entitlements would sunset in two or three years, to allow adequate time for a transition.

Due to Trump’s intervention and angst amongst some Republicans toward moving forward with a repeal-first approach, congressional leaders pivoted. Various press reports in the last week suggest House committees are drafting a robust “replace” package that will accompany repeal legislation. This “repeal-and-replace” bill will use the special reconciliation procedures that allow budget-related provisions to pass with a 51-vote majority (instead of the usual 60 votes needed to break a filibuster) in the Senate, with non-budgetary provisions being considered in subsequent pieces of legislation.

The press reports and strategic leaks from House offices attempt to show progress towards a quick markup—a March 1 markup date was floated in one article—and enactment before Congress next recesses, in late March. But these optimistic stories cannot hide two fundamental truths: 1) Enacting comprehensive “replace” legislation along with repeal will take far longer than anyone in Congress has yet admitted; and 2) Leadership does not have the time—due both to other must-pass legislation, and political pressure from the Right to pass repeal quickly—necessary to fashion a comprehensive “repeal-and-replace” bill.

He may not realize it at present, but in going down the simultaneous “repeal-and-replace” pathway, President Trump made a yuuuuge bet: holding the rest of legislative agenda captive to the rapid enactment of such legislation. Once it becomes more obvious that “repeal-and-replace” will not happen on its current timetable—and that other key elements of the Republican agenda are in jeopardy as a result—it seems likely that Speaker Ryan, President Trump, or both will scale back the “replace” elements of the “repeal-and-replace” bill, to allow it to pass more quickly and easily.

Adding Layers of Complexity

But every element added to a piece of legislation makes it that much more complex. Republicans have an easy template to use for repealing Obamacare: the reconciliation bill that already passed Congress. That bill has been drafted, passed procedural muster in the Senate, and received both a favorable budgetary score and enough votes for enactment.

Conversely, crafting “replace” policies will require more time, conversations with legislative counsel (the office in Congress that actually drafts legislation), discussions about policy options for implementation, and so forth.

House Republicans did engage in some of these conversations when compiling their Better Way agenda last spring. But that plan ultimately did not get translated into legislative language, and the plan itself left important details out (in some cases deliberately).

It seems plausible that House Republicans could fairly easily incorporate some elements of their “replace” agenda—for instance, HSA incentives or funding for high-risk pools—into a repeal reconciliation bill. There are several “off-the-shelf” (i.e., previously drafted) versions of these policy options, and the budgetary effects of these changes are relatively straight-forward (i.e., few interactions with other policy elements).

But on tax credits and Medicaid reform, House Republicans face another major logistical obstacle: Analysis by the Congressional Budget Office (CBO). Longtime observers and congressional historians may recall that CBO was where Hillarycare went to die back in 1994. While Republicans are not necessarily doomed to face a similar fate two decades later, the idea that budget analysts will give “repeal-and-replace” a clean bill of fiscal health within a fortnight—or even a month—defies both credulity and history.

Running the CBO Gauntlet

As someone who worked on Capitol Hill during the Obamacare debate eight years ago, I remember the effect when CBO released one of its first scores of Democrats’ legislation. As the New York Times reported on June 17, 2009, in a piece entitled “Senate Faces Major Setback on Health Care Bill”: “The Senate Finance Committee is delaying its first public drafting session on major health care legislation until after the July Fourth recess, a lengthy setback but one that even Democrats say is critically needed to let them work on reducing the costs of the bill…. The drafting session had been scheduled for Tuesday. But new cost estimates by the Congressional Budget Office on health care proposals came in much more expensive than expected, emboldening critics and alarming Democrats.”

Given the role CBO played in delivering Hillarycare a mortal blow in the 1990s, and the more than nine-month gap between the initial (horrible) CBO scores of Obamacare and that law’s enactment, House leadership’s implication that its “repeal-and-replace” legislation can move straight to passage by receiving a clean bill of health from CBO on the first go-round seems highly unrealistic.

Just like any player moving up from the minor leagues will need time to adjust to big-league pitching, so too will any legislation with as many moving parts as a comprehensive “repeal-and-replace” bill require several, and possibly significant, adjustments and tweaks to receive a CBO score Republicans find acceptable.

While House Republicans’ Better Way plan included a much less complicated and convoluted formula for providing insurance subsidies than Obamacare, they may face other difficulties in achieving a favorable CBO score, particularly regarding to the number of Americans covered under their refundable tax credit regime. These include the following.

No Mandate:  While conservatives view the lack of a requirement to purchase insurance as a feature of any Obamacare alternative, CBO has a long history of viewing a mandate’s absence as a bug—and will score legislation accordingly. In analyzing health reform issues in a December 2008 volume, CBO published an elasticity curve showing take-up of health insurance based on various levels of federal subsidies. The curve claimed that, even with a 100 percent subsidy—the federal government giving away health insurance for “free”—only about 80 percent of individuals will actually obtain coverage. In CBO’s mind, unless the government forces individuals to buy insurance, a significant percentage will not do so.

President Obama didn’t want to include a mandate in Obamacare, not least because he campaigned against it. But CBO essentially forced Democrats to include one to receive a favorable score on the number of Americans covered. If Republicans care about matching the number of individuals insured by Obamacare (some view it as more of a priority than others), the lack of a mandate will cost them on coverage numbers. Alternative mandate-like policies such as auto-enrollment may mitigate that gap, but CBO may not view them as favorably—and they come with their own detractors.

Age-Rated Subsidies: Obamacare uses income as a major factor in calculating its insurance subsidy amounts, which creates two problems. First, because subsidies decline as individuals’ income rises, Obamacare effectively discourages work. CBO has previously calculated that, largely because of these work disincentives, the law will reduce the labor supply by the equivalent of 2.5 million full-time jobs.

Second, the process of reconciling projected income to actual earnings creates administrative complexity. It poses large paperwork burdens on the Internal Revenue Service and taxpayers alike, and requires some individuals to forfeit their refunds and pay back subsidies at tax time.

House Republicans have proposed a simpler system of insurance subsidies, based solely upon age. However, because the subsidies are solely linked to age, low-income individuals receive the same subsidy as millionaires. While much more transparent and fair, this system also does not target resources to those who would need them most. To borrow an analogy, it spreads the peanut butter (i.e., insurance subsidies) more evenly, but also more thinly, over the proverbial piece of bread (i.e., Americans seeking insurance). Given CBO’s beliefs about the likelihood of individuals purchasing insurance outlined above, this change could also cost Republicans significantly in the coverage department.

Medicaid Reform: Republicans have consistently argued that providing states with additional flexibility to manage their Medicaid programs in exchange for a defined federal contribution will allow them to reduce program spending in beneficial ways. Rhode Island’s innovative global compact waiver provides an excellent example of providing better care within an overall budget on expenditures.

However, CBO analysts have publicly taken a different view. In analyzing per capita spending caps for Medicaid—the policy option House Republicans are reportedly incorporating into their alternative—last December, CBO wrote that “States would take a variety of actions to reduce a portion of the additional costs that they would face [from the caps], including restricting enrollment. For people who lose Medicaid coverage, CBO and the staff of the Joint Committee on Taxation estimate that roughly three-quarters would become uninsured.”

CBO has therefore made rather clear that it will score reforms to Medicaid as increasing the number of uninsured.

Speaker Ryan may have pushed for the comprehensive “repeal-and-replace” strategy in part to appease Republican members of Congress who want to see their alternative to Obamacare provide as many Americans with insurance as current law. But it seems highly improbable that CBO will score any Republican tax credit proposal as covering as many Americans as Obamacare. It is also not outside the realm of possibility for CBO to score an alternative as covering fewer Americans than the pre-Obamacare status quo.

The first two CBO scoring issues nixed any attempt by House Republicans to include tax credits as part of their alternative to Obamacare in 2009, when I worked in House leadership. Sources tell me unfavorable scores also nixed House Republicans’ attempt to include a refundable tax credit when the party was crafting responses to a potential Supreme Court ruling striking down the law’s subsidies in 2015. It therefore ranges from likely to certain that an initial CBO score of a comprehensive “repeal-and-replace” bill will go over about as well as it did for Republicans in 2009 and 2015—with generally poor coverage figures compared to Obamacare.

In theory, Republicans could work to surmount some of these obstacles and achieve more robust coverage figures. But such efforts would require time to sort through policy options—time that Republicans don’t currently have—and money to fund insurance subsidies, even though Republicans don’t have an obvious source of funding for them.

Pay-For Problems

Over and above the purely technical problems associated with scoring a “repeal-and-replace” bill, other issues present both policy and political concerns. To wit, if Republicans include refundable tax credits in their plan, how exactly will they finance this new spending? The possibilities range from unpalatable to implausible.

  • They could try to keep some of Obamacare’s tax increases to fund their own spending. But key Republican lawmakers and key constituency groups have strongly supported repealing all of Obamacare’s tax hikes. It seems unlikely that a bill that failed to repeal all of the law’s tax increases could gather enough votes for passage.
  • They could include their own revenue-raisers after repealing all of Obamacare’s tax hikes. For instance, House Republicans could limit the value of employer-provided health coverage. But while economists of all political stripes support such efforts as one key way to reduce health costs, members of the business community would likely oppose this measure, judging from recent news stories. Unions and the middle class likely wouldn’t be keen either. Moreover, by using limits on employer-provided health coverage as a new source of revenue rather than reforming the tax treatment of health insurance in a revenue-neutral way, Republicans would repeal Obamacare’s tax increases, but replace them with other tax increases—an unappetizing political slogan for the party to embrace.
  • They could use Medicaid reform to fund the credits, but that causes the potential problems with coverage numbers outlined above, and will likely generate additional squabbling among governors and states over the funding formula, as outlined in greater detail below.
  • They could use the remaining savings after repealing Obamacare’s tax increases and entitlements—which in the 2015/2016 reconciliation bill totaled $317.5 billion—to fund a new insurance subsidy regime. But such a move raises both policy and political problems. While Republicans could re-direct the $317.5 billion in savings during the first ten years to pay for insurance subsidies, the subsidies would likely have to expire after a decade. Creating a permanent new entitlement (the subsidies) funded by temporary savings would result in a point of order in the Senate—one that takes 60 votes, which Republicans do not have, to overcome—because budget reconciliation bills cannot increase the deficit in any year beyond the ten-year budget window. Thus any subsidies funded by the reconciliation bill’s savings would have to sunset by 2026—a far from ideal outcome. On the political side, the savings in last year’s reconciliation bill came from keeping Obamacare’s reductions in Medicare spending. If Republicans turn around and use that money to fund a new subsidy regime, they would be “raiding Medicare to fund a new entitlement”—the exact same charge Republicans used against Democrats to great effect during the debates over Obamacare.

To put it bluntly, while some Republicans may want to include refundable tax credits in their Obamacare alternative, they have no clear way—and certainly no pain-free way—to fund these credits. Even if they do push forward despite the clear obstacles, finding the right blend among the options listed above will require conversations among members and constituency groups, and multiple rounds of CBO scores for various policy options—all of which will take much more time than House leadership currently envisions.

Then There Are the Political Obstacles

Layered on top of the pay-for difficulties lie other political obstacles preventing quick enactment of a comprehensive “repeal-and-replace” package.

Medicaid: With 16 Republican governors ruling states that expanded Medicaid under Obamacare, and 17 Republican governors in states that did not, the fate of Medicaid expansion remains one of the thorniest questions surrounding repeal. Many states that did expand wish to keep their expansion, while states that did not do not want to be disadvantaged by making what they view as the conservative choice to turn down the new spending from Obamacare. Lawmakers have admitted they have yet to craft a solution on this issue. Attaching Medicaid reform to a “repeal-and-replace” measure will only complicate matters further, by giving states another issue (namely, the new funding formula for the per capita spending caps) to fight over.

House-Senate Differences: While House Republicans gear up to pass a comprehensive “repeal-and-replace” package, reports last week also indicated that Senate leadership still intends to consider legislation more closely resembling the 2015/2016 reconciliation bill. If Speaker Ryan continues to craft a “repeal-and-replace” bill while Majority Leader McConnell pushes “repeal-and-delay,” something will have to bring the two leaders to an agreement reconciling their disparate approaches.

Insurers: Those opposed to the “repeal-and-delay” strategy initially advocated by congressional leaders cited the needs of insurers as reason to pass a full “replacement” of Obamacare concurrent with repeal. Insurers will need to start submitting bids for the 2018 plan cycle by spring, and will want some certainty about how next year’s landscape will look before doing so. Hence the call for a full “repeal-and-replace,” to give insurers fast reassurances about the policy landscape going forward.

But if “full replace” will take until summer to pass—as it almost invariably will—then that argument gets turned on its head. In such circumstances, Congress should act swiftly to include some type of high-risk pool funding for those with pre-existing conditions, to prevent the insurer community from ending up with an influx of very sick, very costly enrollees.

Passing a repeal bill with high-risk pool funding may provide insurers with less certainty than a full “repeal-and-replace” measure, but it would yield infinitely more certainty than Congress arguing until September over the details of “full replace,” with the entire legal and regulatory realm in limbo as insurers must prepare for their 2018 plan offerings.

Conservatives: Some conservatives have philosophical objections to refundable tax credits, or indeed to any “replacement” legislation. Sen. Mike Lee this week called including “replacement” provisions on a repeal bill a “horrible idea.” Lee was one of three Republicans (the others being Ted Cruz and Marco Rubio) who in fall 2015 pushed for more robust repeal legislation, issuing a statement demanding that year’s reconciliation measure include the greatest amount of repeal provisions possible consistent with Senate rules. After the conservatives laid down their marker, the Senate ultimately passed, and the House ratified, the reconciliation measure repealing the law’s entitlements and all of Obamacare’s tax increases.

Some within the party have acknowledged the fractious nature of the “replace” discussions. Ramesh Ponnuru has publicly worried that some conservatives agnostic or skeptical on the merits of a “replace” plan would do nothing following repeal, and therefore wants to link repeal with replace, to force conservatives to vote for a vision of “replace.”

Such maneuvering pre-supposes that conservatives will swallow a “replace” plan they dislike to repeal Obamacare, a dicey proposition given conservatives’ success at obtaining a more robust repeal measure in 2015. It also pre-supposes that conservatives will stand idly by while leadership takes the months necessary to create full-scale “replace” legislation.

If the process continues to drag on in the House, it would not surprise me one bit were conservatives to introduce a discharge petition to force a House floor vote on the 2015/2016 reconciliation bill. Conservatives in the House Freedom Caucus and the Republican Study Committee, likely in conjunction with outside conservative groups, would turn the discharge petition into a litmus test for Republican members of Congress: Are you for repeal—and repeal in the form of legislation that virtually all returning Republicans voted for one short year ago—or not?

While a discharge petition needs 218 member signatures before its sponsor can force a floor vote, the mere introduction of a discharge petition would increase the pressure on House leadership to move quickly on repeal. Moreover, it would highlight the fact that neither Speaker Ryan nor President Trump can afford to spend the entire spring and summer slogging through a long legislative process regarding Obamacare.

Now We Come to the Opportunity Costs

Most of this year’s major action items require the Obamacare reconciliation bill to pass. Once and only once that legislation passes can Congress pass a second budget, allowing for a second budget reconciliation measure to move through the Senate. Specific items held in limbo due to the Obamacare debate include the following.

Tax Reform: Republicans want to use the second reconciliation bill to overhaul the tax code. (President Trump may also want to use the tax reform bill to finance his planned infrastructure package.) But because the current budget does not include reconciliation instructions regarding revenues, Congress must pass another budget with specific reconciliation instructions before tax reform can move through the Senate with a simple (51-vote) majority. But before Congress passes another budget, it must first pass the reconciliation bill (i.e., the Obamacare bill) related to this budget.

Debt Limit: The current suspension of the debt limit expires on March 15. While the Treasury can use extraordinary measures to stave off a debt default for several months, Congress will likely have to address the debt limit prior to its August recess. As with tax reform, the debt limit (and spending and entitlement reforms to accompany same) can be enacted with a simple majority in the Senate via budget reconciliation. But, as with tax reform, doing so first requires passing another budget, which requires enacting the Obamacare reconciliation bill.

Appropriations: The current stopgap spending agreement expires on April 28. Congress will need to pass another spending measure by then—quite possibly including a request by the president for additional border security funds—and begin considering spending bills for the new fiscal year that starts September 30. Here again, passage of these legislative provisions would be greatly aided by passage of another budget to set fiscal parameters, but that cannot happen until the Obamacare reconciliation bill is on the statute books.

As other observers have begun noting, many of the major “must-pass” and “want-to-pass” pieces of legislation—tax reform; Trump’s infrastructure package; a debt limit increase; appropriations legislation; funding for border security—remain essentially captive to the Obamacare “repeal-and-replace” process. The scene resembles the airspace over New York during rush hour, with planes circling overhead while one plane (the Obamacare bill) attempts to land. Unfortunately, the longer the planes circle, one or more of them will run out of fuel, effectively crashing major pieces of the Trump/Ryan agenda due to legislative inaction and neglect.

The Available Political Options

With a legislative process for “repeal-and-replace” likely to take months longer than currently advertised, and a series of other competing priorities contingent on it, Speaker Ryan and President Trump face three options.

Punt: Focus on passing the other agenda items first, and come back to Obamacare later;

Plow Ahead: Remain on the current course, knowing that Obamacare will jeopardize much of Trump’s and Ryan’s other agenda items; or

Pivot/Pare Back: Return to something approaching last year’s reconciliation bill, and postpone major “replace” legislation until a future reconciliation measure.

Given the current environment, the third option seems the clear “least bad” outcome. The first would represent a major political setback, effectively admitting defeat on the president’s top agenda item and betraying Republicans’ seven-year-long commitment to repeal that conservatives sharply opposed to Obamacare will never forget, and may never forgive. The second jeopardizes, if not completely sacrifices, most of the party’s legislative agenda, including items the president will want to tout in his re-election bid.

Therefore, it seems likely that Ryan, Trump, or both will eventually move to pare back the current comprehensive “repeal-and-replace” legislation towards something more closely resembling the 2015/2016 repeal reconciliation bill.

The legislation may include elements of “replace,” but only those with a clear fiscal nexus (due to the Senate’s rules regarding reconciliation) and broad support among Republicans. HSA incentives and funding for high-risk pools might qualify. But more robust provisions, such as Medicaid reforms or refundable tax credits, will likely get jettisoned for the time being, to help pass slimmed down legislation yet this spring.

Time’s a Wastin’

To sum up: The likelihood that House Republicans can get a comprehensive “repeal-and-replace” bill—defined as one with either tax credits, Medicaid reform, or both—1) drafted; 2) cleared by the Senate parliamentarian; 3) scored favorably by CBO; and 4) with enough member support to ensure it passes in time for a mark-up on March 1—two weeks from now—is a nice round number: Zero-point-zero percent.

Likewise the chances of enacting a comprehensive “repeal-and-replace” bill by Congress’ Easter recess. It just won’t happen. For a bill signing ceremony for a comprehensive “repeal-and-replace” bill, August recess seems a likelier, albeit still ambitious, target.

Republicans have already blown through two deadlines on “repeal-and-replace”: the January 27 deadline for committees to report reconciliation measures to the House and Senate Budget Committees, and the President’s Day recess, the original tentative deadline for getting repeal legislation to President Trump’s desk. Any further delays will accelerate both conservative angst and the same types of process stories from the media—“Republicans arguing amongst themselves on repealing Obamacare”—that plagued Democrats from the summer of 2009 through the law’s enactment.

Some may find this analysis harsh, or even impertinent. Some may want to take issue with my assumptions—Newt Gingrich would no doubt dispute CBO’s scoring methods, long and loudly. But policy-making involves crafting solutions given the way things are, not the way we wish them to be. And every day that goes by while Congress remains on the current “repeal-and-replace” pathway—which seems increasingly like a strategic box canyon—will only jeopardize the success of other critical policy priorities.

For all his wealth, Trump gets the same amount of one thing as everyone else: Time. For that reason, his administration and Speaker Ryan should re-assess their current strategy on Obamacare—the sooner the better. Time’s a wastin’, and the entire Republican agenda is at stake.

This post was originally published at The Federalist.

Three Lessons from Last Year’s Obamacare Repeal Effort

In a move virtually ignored outside Washington and largely unnoticed even within it, last December the House and Senate passed legislation repealing much of Obamacare. President Obama promptly vetoed the measure — an obstacle that will disappear come January 20. As reporters and policymakers attempt to catch up and learn the details of a process they had not closely followed, three important lessons stand out from last year’s “dry run” at repealing Obamacare.

The Senate Should Take the Lead

The legislation in question, H.R. 3762, made it to President Obama’s desk only because Republicans used a special procedure called budget reconciliation to circumvent the Senate’s 60-vote requirement to overcome a Democratic filibuster. While reconciliation allowed the bill to make it to the president’s desk, it came with several procedural strings in the Senate. Reconciliation legislation may only consider provisions that are primarily budgetary in nature; policy changes, or policy changes with an incidental fiscal impact, will get stripped from the bill. In addition, reconciliation legislation may not increase the budget deficit.

Unfortunately, the original version of the bill the House introduced did not comply with the Senate requirements. The legislation repealed Obamacare’s Independent Payment Advisory Board (IPAB) — but because that change was primarily policy-related and not fiscal in nature, it did not pass muster with the Senate parliamentarian. Likewise, according to a cost estimate by the Congressional Budget Office, the House-passed bill would have increased the deficit in the “out years” beyond the ten-year budget window, making it subject to another point-of-order challenge that would require 60 votes to overcome. Ultimately, the legislation contained enough of these procedural flaws that Senate majority leader Mitch McConnell had to introduce a completely new substitute for the bill as it came to the Senate floor, to ensure that it would receive the procedural protections accorded to a reconciliation measure.

The arcane and technical nature of the budget-reconciliation process means that the Senate will play the key role in determining what passes — simply because Senate procedure will dictate what can pass. While the House has the constitutional prerogative to originate all tax legislation, and by custom it initiates most major spending legislation, the Senate may do well to initiate action in this particular case. House Republicans proposed an Obamacare-replacement plan earlier this year, Paul Ryan’s “A Better Way,” but what good is passing that through the House if much of it ends up on the Senate’s proverbial cutting-room floor?

Personnel Matters, Because Institutional Memory Is Scarce

The original reconciliation bill was introduced in the House on October 16, during what amounted to an interval between leaders. John Boehner had announced his intention to resign the speakership, but Paul Ryan had not yet assumed that title. And while House members played another round of “musical chairs,” staff underwent their own turnover, as Speaker Boehner’s longtime health-policy adviser departed Capitol Hill a few weeks before Boehner announced his surprise resignation.

To say that relevant leaders and committee chairs have swapped places in the House recently is putting it mildly. Not one has served in his current post for more than two years. Two years ago, Paul Ryan chaired the House Budget Committee; his reign at Ways and Means lasted a brief nine months before he assumed the speakership. Elsewhere in leadership, both Majority Leader Kevin McCarthy and Majority Whip Steve Scalise assumed their jobs after the defeat of Eric Cantor in August 2014. At the committees, Budget Committee chairman Tom Price and Ways and Means Committee chairman Kevin Brady succeeded Paul Ryan in leading their respective committees last year. And the Energy and Commerce and Education and Workforce Committees will soon choose new chairmen to assume their gavels in January.

While Senate leadership has remained more stable at the member level, most of the staff in both chambers has turned over since the Obamacare debate of 2009–10. I served in House leadership during 2009, and Senate leadership from 2010 to 2012; most of my former colleagues have long since moved on, whether to lobbying jobs, grad school, or even outside Washington altogether. Both at the member level and the staff level, the critically important institutional knowledge of what happened to Democrats — and when, why, and how — during the Obamacare debacle eight short years ago is dangerously thin.

The Washington gossip circles seem most interested in playing the parlor game of who will fill what post in the new administration. But particularly if the administration defers to Capitol Hill on policy, the true action in determining what happens to Obamacare — and what replaces it — may well lie at the other end of Pennsylvania Avenue. Both reporters and would-be job applicants should react and plan accordingly.

An Influential Troika of Senate Conservatives

In addition to its procedural shortfalls, the original House reconciliation bill represented something much less than full repeal of Obamacare. While the law as enacted contains 419 sections, four of which had already been repealed prior to last October, the House’s reconciliation bill repealed just seven of them. Admittedly, much of Obamacare contains extraneous provisions unrelated to the law’s coverage expansions: nursing-home regulations, loan-forgiveness programs, and the like. But the original House reconciliation bill left intact many of Obamacare’s tax increases and all of its coverage expansions, leaving it far short of anything that could be called full repeal.

Into the breach stepped three conservative senators: Mike Lee, Marco Rubio, and Ted Cruz. The day before the House voted to pass its reconciliation bill, they issued a joint statement calling it thin gruel indeed:

On Friday the House of Representatives is set to vote on a reconciliation bill that repeals only parts of Obamacare. This simply isn’t good enough. Each of us campaigned on a promise to fully repeal Obamacare, and a reconciliation bill is the best way to send such legislation to President Obama’s desk. If this bill cannot be amended so that it fully repeals Obamacare pursuant to Senate rules, we cannot support this bill. With millions of Americans now getting health premium increase notices in the mail, we owe our constituents nothing less. 

Knowing that the bill lacked the votes to pass the chamber without support from the three conservatives, Senate leadership significantly broadened the bill’s scope. The revised version that went to the president’s desk repealed all of the law’s tax increases and all of its coverage expansions. It was not a one-sentence repeal bill that eradicated all of Obamacare from the statute books, but it came much closer to “fully repeal[ing] Obamacare pursuant to Senate rules,” as the three senators laid out in their statement.

The conservatives’ mettle will be tested once again. Already, Republican congressional sources are telling reporters that they intend to keep the law’s Medicaid expansion, albeit in a different fashion. “One of the aides said this version of the bill [that passed last year] was mostly about ‘messaging,’ and that this time, ‘We’re not going to use that package. We’re not dumb.’”

Apart from the wisdom of calling a bill that their bosses voted for less than one year ago “dumb,” the comment clarifies the obvious fissure points that will emerge in the coming weeks. Will conservatives such as Lee, Rubio, and Cruz hold out for legislation mirroring last year’s bill — and vote no if they do not receive it? Conversely, what Republican who voted for the reconciliation bill last year will object if it returns to the Senate floor? Will senators be willing to vote against something in 2017 that they voted for in 2015?

As I noted last week, Republicans’ path on Obamacare could prove more complicated than the new conventional wisdom in Washington suggests. If past is prologue, last year’s reconciliation bill provides one possible roadmap for how the congressional debate may play out.

This post was originally published at National Review.