Obamacare “Reform” May Be Going Pear-Shaped in the Senate

The last few days there have been worried reports about how the Republicans had gone into a secret huddle and were rumored to be on their way to coming up with Obamacare “reform”. For instance, from the New York Times:

As they draft legislation to repeal the Affordable Care Act, Senate Republican leaders are aiming to transform large sections of the American health care system without a single hearing on their bill and without a formal, open drafting session.

That has created an air of distrust and concern — on and off Capitol Hill, with Democrats but also with Republicans…

The secrecy surrounding the Senate measure to repeal and replace the Affordable Care Act is remarkable — at least for a health care measure this consequential….

It is not unusual for lawmakers to draft major legislation in private, but they usually refine, debate and amend it in open committee sessions. The House bill to repeal the Affordable Care Act did not receive a hearing, where outside experts could have testified. But lawmakers dissected its contents and were able to propose changes at three stages: in the Ways and Means, Energy and Commerce, and Budget Committees.

Senate Republican leaders evidently think their back-room approach gives them the best chance to devise a health care bill that can squeak through the Senate, given their narrow majority and the policy differences in their conference.

Mind you, even though we have been critics of Obamacare (its clearest benefit has been Medicaid expansion, but residents of many states are left out), we do not underestimate the ability of Republicans to make it worse, particularly when that’s the point.

But our view has long been that anything that would satisfy the House Freedom Caucus crazies extremists, who have enough seats to be able to deny Republicans a majority vote, would not fly in the Senate. Gerrymandering has created Congressional districts where elections are settled in primaries. Too often for Republicans, being more rabidly right wing is the royal road to victory. By contrast, enough Senators hail from big or biggish states with sufficiently diverse economic and social profiles that bowing to Freedom Caucus dictates would be political suicide.

But being the majority party isn’t necessarily a good position to be in if you have too many internal divisions. It now looks like all of that Republican “secret palaver will deliver a miracle baby” talk was pure hype. The latest news reports suggest that the Republicans can’t even get their act together in the Senate to agree on a bill.

Recall that the Republicans have only a two seat majority in the Senate. They can’t afford much in the way of defections. Even though Republican Senators were trying to craft a more moderate version of the bill than the one that passed the House, there are enough hard core conservatives in the Senate to make that difficult, if not impossible.

From the Wall Street Journal:

Negotiations over the bill’s contours remain fluid as Republican senators wrangle over its central tenets. No Republicans have taken a fixed position for or against the bill, in part because its language hasn’t yet been finalized. But President Donald Trump’s recent private disparagement of the bill passed by the House last month as too stingy suggests the Senate legislation is likely to only tilt more toward the chamber’s centrists.

That’s making it a harder sell for conservative senators including Rand Paul of Kentucky and Mike Lee of Utah…

Outside conservative groups, fearing that Senate GOP leaders are watering down the House bill’s Medicaid savings and rollback of ACA regulations, have meanwhile begun speaking out more forcefully in recent days. “Everything we’re hearing right now is frustrating and concerning to us,” said Jason Pye, director of public policy at FreedomWorks, a grass-roots-oriented conservative group.

Senate GOP leaders have said they hope to vote on a health overhaul by Congress’ July 4 recess. That prospect seems increasingly remote, though party leaders haven’t ruled it out.

Time weighs against getting a bill passed. Generally speaking, protracted negotiations are failure prone. And here, the Republicans know it behooves them to get their act together, yet they seem unable to. One conservative political junkie I know said months ago that the Republicans needed to pass an Obamacare bill because it was such a central campaign promise, and they needed to get it done by July at the latest or it risked denting election campaign dynamics. The plan as of a few weeks ago was to have a Senate bill passed by the July 4 break and then hammer out a compromise between the Senate and House versions before the month-long August recess. Missing the July 4 deadline increases the odds the bill will still be in play after Labor Day, when Republican Congresscritters will be under even more pressure to tell constituents they’ve gotten something done. That means they’ll feel pressure to pass less troublesome legislation, diverting attention from the ACHA bill.

Another potentially complicating factor is a block of Republican Senators, including Alaska’s Lisa Murkowski, are loath to end Medicaid expansion, which is something the “centrist” Senate plan apparently calls for. From The Hill:

Sen. Lisa Murkowski (R-Alaska), a potential key swing vote on an ObamaCare repeal-and-replace plan, isn’t sure she could support the emerging Senate Republican healthcare bill..

Murkowski wouldn’t commit when asked if she would support a seven-year phaseout of the Medicaid expansion, which some moderate GOP senators are pushing. Nor would she say whether she would support a slower phaseout or a faster one.

“My position on Medicaid expansion and my support for it hasn’t changed,” Murkowski said.

The Alaska Republican has previously said she wouldn’t vote to repeal the Medicaid expansion if the Alaska state Legislature wants to keep it. And she was one of four senators who sent a letter to Majority Leader Mitch McConnell (R-Ky.) in early March saying they couldn’t support a bill that didn’t have protections for people in the Medicaid expansion population.

Making things more fraught, insurers have until June 21 to decide what insurance they will sell on specific state Obamacare marketplaces. From Vox earlier this year:

The most important day for Obamacare is June 21, 2017. About three months from now — on, coincidentally, the very first day of summer — health insurers have to decide whether they will sell coverage on the Obamacare marketplaces.

“It will give us the first indication of what the ballpark rate increases are, what counties have insurers and which ones don’t,” says Robert Laszewski, an industry consultant who works with insurers that sell on the marketplace. “Insurers will have to make a statement.”

The Obamacare marketplaces are, at the moment, one of the most at-risk parts of the Affordable Care Act. About 12 million Americans who buy insurance on their own — through either a state marketplace or Healthcare.gov — currently rely on these online insurance portals for coverage. Eighty-five percent receive a tax credit to lower their monthly premiums.

The marketplaces only work if private health insurance plans show up and sell coverage. Last year, well before Trump’s election, some insurers dropped out of the marketplaces because they saw them as too small or unstable. June 21 is when we’ll get the first look at whether the marketplaces are in okay shape and have enough competition to survive 2018 — or whether they are, as President Donald Trump predicted, “exploding.”

Although if a bill were to pass, one would assume most of its provisions would phase in for practical as well as political reasons, uncertainty about the future of Obamacare can’t be a plus for insurers. And if more insurers withdraw from marketplaces and/or jack up prices, it’s not hard to see how both parties will try to spin that to their advantage.

So as hard as it is to tune out the short-term drama, the fight over Obamacare’s future has made “single payer” part of the lexicon. Hopefully bona fide reformers will find a way to use the likely collapse of the Republican’s “gut Obamacare” scheme to advance sounder and more beneficial programs.

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  1. Disturbed Voter

    The problem with secret negotiations prior to putting a plan to the vote, is that once you put out a Senate approved plan, it will no longer be secret ;-) In fact you need to get Senators and the House to vote on it, with the contents never going public until afterward … kind of how we got the ACA in the first place ;-)) They will have to vote for it without knowing what is in it … where have I heard that before? Why not have the legislative process turn into a Monte Hall Let’s Make A Deal show? Will the Republicans keep what is unknown behind door #1 or go for what is unknown behind door #3?

    1. marym

      Repeating this canard about the ACA process distracts from discussions of problems we face today with the ACA, the known and unknown substance of Republican proposals, and current concerns about process.

      I personally watched seemingly endless hours of Baucus committee debate. This included much catering to Republicans Susan Collins and Olympia Snow, as if they were ever going to vote for anything helpful.

      In June and July 2009, with Democrats in charge, the Senate health committee spent nearly 60 hours over 13 days marking up the bill that became the Affordable Care Act. That September and October, the Senate Finance Committee worked on the legislation for eight days — its longest markup in two decades. It considered more than 130 amendments and held 79 roll-call votes.

      The full Senate debated the health care bill for 25 straight days before passing it on Dec. 24, 2009.


      The final bill was posted on the web for 72 hours. In context, Pelosi’s careless remark meant that Congress had to pass the bill so people would be able to find out what it did for them, apart from the heated controversies surrounding the long debate that actually occurred.

      As someone who has opposed to the ACA from the left, from the beginning, including the policy and much about the process (deals with the drug industry, not allowing discussion of single payer, etc.), I surely don’t want to spend time comparing what Republicans are doing now and what Democrats did then, so I hope you save this link for future reference.

      1. WorldBLee

        Does it matter how much debating on ACA was done in the Senate when the actual bill was written by lobbyists and nothing in the debating period changed that?

      2. Deloss Brown

        Thank you for pointing out that the desire to get some Republicans–any Republicans–to sign on to the ACA, to make it a bipartisan effort, is one of the reasons the public option doesn’t exist. I’m fairly left-wing, and it irritates when NC readers continue to shake their fists and froth about how bad Obama was. The refrain “It’s Obama’s fault!” continues to be heard–from Republicans, that’s no surprise, but from Democrats it sounds odd. You’d think they’d notice that they’ve now got the Creature from the Black Lagoon as President, and I doubt that they think that’s an improvement. I am pleased to see Yves acknowledge above that

        Mind you, even though we have been critics of Obamacare (its clearest benefit has been Medicaid expansion, but residents of many states are left out), we do not underestimate the ability of Republicans to make it worse, particularly when that’s the point.

        I hope Yves found something to eat in London.

        1. Yves Smith Post author

          Lambert was in London, not me! I am slaving away at my usual location now.

          I was in London last quite a few years ago, but the food has gotten to be very good. No more having to rely on Indian or Chinese if you like tasty food.

          1. Deloss Brown

            If you say so, chère Mme. Yves. In my whole life, in sum, I have spent 8 hours in London, and that was because the boat to/from France stopped in Southampton for a day. We walked around and spent most of our time in public houses. I may have eaten bangers and mashed. I was treated for free by the Public Health Service when something got in my eye. I did not see the Globe, nor the Rose, nor anything else of cultural significance. And I’m supposed to be a Shakespeare expert! Well, Shakespeare obviously loved France.

            I hope you gave Lambert gastronomical guidance.

            Confusion to our enemies.

            You can moderate this frivolous comment out of existence, and it won’t hurt my feelings. I have the hide of a rhinoceros (not to be confused with a RINO).

            1. Yves Smith Post author

              The main reason I’ve spent some time there is it’s a finance center, and so in my previous incarnation as a consultant, I had client business there upon occasion. I wish I could have spent more time there touristing but that’s never how things sorted out.

  2. notabanker

    AARP is running a TV ad campaign to call your Senator to vote no on reform. There is some legit big money opposition to this.

  3. jackiebass

    Republicans have the tiger by the tail and can’t let go. They are reaping what they sowed. For years they demonized Obamacare and promised something better. It was all word because it’s obvious republicans had no plan. Now they are struggling because of what they became. To gain control , republicans welcomed fringe groups into the fold. The problem is that republicans can’t control them , and get them to tow the party line. To get elected Trump did the same thing. He made promises he couldn’t keep or had no intention of keeping. Personally I believe Trump had or has no real plan of what he wants to accomplish. I think he views the presidency as a reality show with him as the star. In one of his songs the late Meryl Haggard called it rainbow stew. Republicans served up a big bowl of rainbow stew. People ate it and wanted more. Unfortunately the pot of stew is empty.

    1. Spunky McGregor

      They had a plan before Obama moved the countries healthcare discussion to the left. This was a good thing, in my opinion. Healthcare that can’t be accessed by the sick (pre-existing conditions) or the poor (Gods little angels in the rust belt) is probably bad policy and bad optics. The Republicans may have a better plan, but they have to content with having it be to the left of whatever the status quo was ten years ago.

      I hate to bring morality into the discussion, but a country that can afford to deploy ten nuclear aircraft carriers to all corners of the globe, but can’t figure out how to take care of the sick isn’t really ‘Great’ anymore. Ciao!

        1. John k

          No, exceptional is right. It is normal for a first world country to provide healthcare for all as a right. It is exceptional to not do so.
          Same with starting wars, interfering in other country elections, gun violence, opioids epidemic, etc.
          And is any other first world country as corrupt as ours?
          very exceptional indeed.

          1. oh

            Everything’s geared towards helping multi-national corporations at the expense of the people.

  4. Politics puppy

    alaska is high cost of health everything. Murkowski also must deal with high premiums and the tax credit issue. And their nursing homes cost nearly as much as NY, so regular Medicaid important. Add to that the planned parenthood issue. What advocates are wondering is why isn’t Sen. Sullivan concerned at all.

    I’ll add big concern by advocates is an Alaska buyout to get her vote.

  5. craazyboy

    It’s a Market, and a Monopoly one at that ,too. So there is a long and complex Market Discovery Process the Senate Rs must navigate (using a proctoscope, I imagine) with the Monopoly Provider. They also must be careful to allow flexibility, so as not to stifle creativity.

    Krugman is doing a paper on it, and Thomas L. Freidman has contracted with Wapo to explain Krugman’s math. Should be exciting. NYT highly placed sources leaked the word “Tensor Math” – or rather wrote it in a coed restroom stall in the Capitol building. Paul Ryan placed a bread crumb trail there for sources to follow, and find their way back again.

    The TPP is coming back, always, and they already have a clause written in invisible ink giving 7 years before any contract details may be released to anyone regarding prices, services rendered, or doctor-patient relationships.

    Skeptics warn this could backfire for the providers, since there is no accessible paper trail for the transaction, making billing overly complex and confusing for all. But a outside focus group firm was contacted to study it in the basement bathroom and advised outsourcing the programming to India, and that they will come up with a solution.

    Paul Ryan brought 7 free baloney sandwiches to the committee working lunch hour. He is signaling criticism of Trump Care and the TPP is baloney. Besides, he pointed out that a midnight rider will be attached to the Bill post House vote pushing the legislation down to the states, further saving the federal government all the cost. So the CBO “scoring” is baloney too! This came as a relief and everyone’s mood improved. Golf scores were much improved that afternoon.

    We can expect lots of self-driving ambulances and a goodly number of unisex Asian Robots with modestly flat chests.

    Maybe even an up market space station, like in that stooped Matt Damon movie, if they will give NASA some decent funding.

    “Warning Will Robinson! We are Freezing your social media accounts until The Arbitration Tribunal settles your case! Abstain from eating, drink plenty of fluids, and take two spoonful’s of opium powder, every morning, until I warn otherwise “

  6. Mikerw0

    I don’t buy any of these stories. Until a time comes that Senate Republicans will vote against McConnell the operative assumption is that if McConnell wants something, or doesn’t, it passes.

    He appears to want to pass something close to the House bill. Therefore, despite all the smoke around the process one should expect this happens unless McConnell changes his mind.

    Just observing the track record.

    1. PH

      Good comment.

      The tradition of Repub party discipline is strong. And for reasons that I do not understand, and I do not think are publicly discussed, McConnell has especially strong sway. Maybe the reason is simply respect for his strategic and tactical mastery.

    2. Yves Smith Post author

      McConnell is not a dictator.

      As I said, Senators by nature have more diverse constituencies than Congressmen. Many of the House crazies are from lily-white affluent districts. Their incentives are to go radical. By contrast, there aren’t many states where the entire state hews majority hard-core conservative.

      1. PH

        Not a dictator. But his caucus trusts him, fears him, and usually follows him.

        McConnell will try to find a consensus, and demand small concessions from eveywhere.

        I agree with you that if individual senator sees “problem” that will threaten seat, he or she will bolt. But recognizing the magnitude of the problem depends on staff and usual circle of close lobbyists. In news blackout, maybe sirens will blare anyway. But maybe not.

        Just because supporting McConnell bill might be politically foolish in long run does not mean he cannot stampede the caucus into following him.

        Do we know what senator is de facto lead in drafting? That is probably important.

  7. RUKidding

    McConnell’s vetching that there were “gazillions of hearing” about repealing ACA during the Obama Admin falls on my deaf ears. McConnell claims that We, The People, simply don’t need to know anything more because this was “discussed” previously gazillions of times, so We, The People, “should know” what’s coming.

    I call bullsh*t. Yeah yeah, the R-Team wasted inordinate amounts of time and MY tax dollars attempting pass endless Repeal ACA bills. But what they NEVER ever did was provide the slimest example of what they’d replace it with.

    Fact is, they did NOT have a replacement. They vetched and whined and bitched and moaned about how ACA was allegedly “rushed through,” but now, of course, in a typical display of hypocrisy, they rush their own super SECRET bills through.

    I’m so g-damned sick of this whole sh*t show. They’re gonna produce something that’s every bit as egregious as the House Bill. So I hope Republican voters are super satisfied that they got to “stick it to the Libtards,” because that’s all they’re gonna get outta this Congress.

    Yeah, yeah, ACA sucks. Whatever these rapacious, predatory, disgusting filth come up with will be even worse.

  8. PH

    I am worried.

    McConnell is a special force. His focus will not be policy; it willbe talking points for the 2018 election.

    In the past, somewhat to my amazement, McConnell has decided that it is important for the Repubs to have a reputation for being able to govern. For that reason, i expect a powerful and sincere effort to pass a bill through the Senate.

    In my view, the third rail for Repubs are nursing home costs. If Medicaid is stripped, where do Great grandma and Great grandpa go?

    Expect a bill that cuts Medicaid drastically, but not until after 2018.

  9. Chloe

    Yves, I always value your opinion; in fact I seek it out, and I sure hope you are right that this effort may falter and hopefully even fail, but I do not underestimate the cunning and conniving of the Republicans, especially under the masterfully Machiavellian machinations of (the vile) Mitch McConnell…The Dems are completely inept by comparison…All decent people should be very worried right now, as the Republicans move to surreptitiously decimate Medicaid. If successful, this effort will doubtless be followed by the decimation of both Social Security and Medicare, because Conservatives believe that all New Deal/Great Society programs are unconstitutional aberrations which need to be undone. It matters not at all to them what good these programs have accomplished, or how many lives they have saved; they conflict with conservative ideology, which for them reigns supreme. Let us all hope that sanity prevails, but Trump is positively itching to sign sweeping legislation, so he is unlikely to ultimately care if the Medicaid policy is “too mean.”

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