GOP Health Care Bill Pulled

September 27, 2017

Senate Republican’s last-ditch effort to overhaul the Affordable Care Act (ACA) was pulled from floor consideration on Tuesday, Sept. 26. Republicans had planned to begin Senate floor debate on the bill on Sept. 27 with a key procedural vote, however Senate Majority Leader McConnell (R-Ky.) Tuesday pulled the bill from floor consideration given its unlikely passage.

Citing July’s one-vote failure to advance a different version of ACA replace legislation, McConnell said he does not want his party to go through another excruciating defeat. Such an exercise appeared all but certain when legislation suffered major set-backs in recent days as Republican senators continue to voice either outright opposition to or express serious reservations about legislation spearheaded by Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.).

Broadly, the Graham-Cassidy bill would dismantle the overall structure of the ACA, including the expansion of the Medicaid program, tax credits to help lower-income individuals afford the cost of health insurance coverage, and cost-sharing reduction subsidies in 2020, and replace it with block grants for states to use to administer their own respective health insurance plans.

The revenue stream for the block grants would be derived from many of the revenue provisions that currently fund the ACA, such as the 3.8 percent net investment income tax and the 0.9 percent Medicare Hospital Insurance tax assessed on certain upper-income individuals, as well as corporate offsets such as the annual fee on health insurance providers, the fee on branded drug importers, limits on executive compensation for certain employees of covered insurance providers, and the excise tax on “Cadillac” group health insurance programs.

The Graham – Cassidy bill would effectively repeal the ACA’s individual and employer mandates by reducing the penalties for noncompliance to zero retroactive to calendar year 2016, and would repeal the medical device excise tax effective for sales after Dec. 31, 2017.

There had been no indication that even one Democrat would break with their party and back Graham-Cassidy. Republicans hold 52 Senate seats, so if more than two Republican senators defected, the legislation would fail. As of yesterday, there were three confirmed ‘no’ Republican senators, giving a clear indication that Graham-Cassidy—in its current form—will not pass the upper chamber.

Sen. Rand Paul (R-Ky.) said he could not support Graham-Cassidy because it keeps most of the ACA’s spending and taxes in place even as it shifts decision-making to the states. Sen. John McCain (R-Ariz.) announced his opposition to the bill, despite the strong backing of Arizona’s Republican governor and McCain’s long-standing friendship with Sen. Graham. McCain’s no vote brought down the Republicans’ last effort to overhaul the ACA in July. Most recently, Sen. Susan Collins (R-Maine) stated her opposition to Graham-Cassidy, because of its redistribution of Medicaid funding from states that expanded their programs under the ACA as well as blocking Planned Parenthood from receiving federal reimbursements. Sen. Lisa Murkowski (R-Alaska) also had raised concerns about Medicaid and Planned Parenthood.

Complicating matters, Sen. Ted Cruz (R-Texas) had said he could not support the bill despite Texas seeing a significant increase in Medicaid spending and regulatory flexibility under Graham-Cassidy. Some Senate Republicans believed Cruz was withholding his vote in order to gain concessions but that he would ultimately support the bill.

Republicans were hoping to pass repeal-and-replace legislation by Sept. 30 in order to use the fast-track reconciliation procedures that allow them to pass the legislation on a party-line vote with just 51 votes. After September 30, Republicans will need 60 votes to block a Democrat filibuster.