Senate Delays ACA Repeal Vote

June 28, 2017

On June 27, Senate Republicans delayed their plan to vote on their legislation to repeal and replace the Patient Protection and Affordable Care Act (ACA), amidst strong resistance from some moderate and conservative Republicans to even begin debate. Originally, Senate Republicans planned to vote on a critical procedural vote on their ACA repeal bill on June 28, but now they plan to rewrite their health bill over the July 4 recess and get a new analysis from the Congressional Budget Office (CBO). Additionally, President Donald Trump invited all Senate Republicans to the White House for a meeting on June 27 to discuss the Republican’s ACA repeal plans.

Since Senate Republican leaders unveiled their draft legislation on June 22, they have struggled to come up with the 50 votes they need to start work on the measure. At least five Senate Republicans — moderates Susan Collins (Maine) and Dean Heller (Nev.) and conservatives Ron Johnson (Wis.), Rand Paul (Ky.) and Mike Lee (Utah) — have said they were not ready to vote on the ACA repeal bill without alterations. Senate Majority Leader Mitch McConnell (R-Ky.) can only afford to lose two Republican senators in the face of a unified Democratic opposition, and a significant bloc of other senators are undecided.

Adding further complications is the analysis from CBO that said the Senate’s ACA replacement would reduce revenues by $701 billion over a decade, about $300 billion less than the House’s American Health Care Act (AHCA). The CBO also found that the legislation would leave 22 million more people uninsured in the next decade. The two bills are more similar when it comes to tax cuts that do not deal with health coverage — $563 billion in the Senate bill, compared to $662 billion for the House bill. On the tax front, the Senate draft is similar to the House-passed bill and would, eliminate most of new taxes enacted as part of the ACA on a more-or-less immediate basis. As with the House-passed bill, the draft Senate plan would retain, but further delay implementation of, the “Cadillac” tax on high-cost employer-provided health plans. Under current law, the 40 percent excise tax levied at the insurance company level is scheduled to come on-line in 2020. The Senate measure would further delay its effective date to 2026. The major difference to the two bills is that the Senate offers less generous subsidies for buying insurance.

The Senate plan would leave in place ACA requirements for coverage for individuals with pre-existing conditions and allow individuals to stay on their parents’ plan through age 26, while funding insurer reimbursements related to covering certain low-income Americans – payments which are the subject of current litigation – through 2019.

With respect to traditional Medicaid (i.e., outside the ACA Medicaid expansion), the Senate draft, like the House proposal, provides that beginning in 2020 the program would no longer be structured as an open-ended entitlement and instead would allow states to choose between receiving either a block grant or a “per capita cap.” But beginning in the 2025, the Senate measure would base those payments on a lower growth rate.

Similar to the AHCA, the Senate draft would effectively repeal the ACA’s individual and employer mandates by reducing the penalty for noncompliance to zero for months after Dec. 31, 2015. Notably absent from the Senate draft, however, is a continuous coverage provision in the House bill that would permit health insurance companies to impose a surcharge of up to 30 percent on individuals who failed to maintain insurance coverage for the prior year. The House provision is intended to encourage those with health insurance to keep it.

Upon release of the Senate draft, critics were early to comment, and based on concerns from members of the Republican caucus, the bill’s passage—in its current form—is not expected, and now leadership will rework the discussion draft and continue with negotiations.