The House Republican bill repealing and replacing ObamaCare faces high procedural hurdles in the Senate that will likely force GOP negotiators to throw out key portions of the legislation.
Republicans are using special budget rules to prevent Democrats from filibustering the legislation. But the Senate has long warned the House that the rules could prohibit certain things in the bill from being included.
GOP senators have already flagged two problems: language allowing states to opt out of regulations defining what healthcare services insurers must cover, and a provision banning them from discriminating against people based on their health.
Another part of the House bill that allows health plans to charge older policyholders five times what they charge young adults — a shift from the 3-to-1 ratio mandated by ObamaCare — could also be a problem.
Language that allows insurers to place a 30 percent surcharge on people who let their coverage lapse also poses procedural problems.
The House bill also makes reforms to Medicaid, such as allowing states to impose work requirements, and caps federal payments to states. Both provisions could run afoul of Senate rules.
Senate Republican Whip John Cornyn (Texas) said this week the House bill “will be modified here if for no other reason than the rules, the reconciliation rules, would require it.”
Cornyn said he doesn’t yet know whether the House-proposed changes to insurance regulations — the centerpiece of the compromise between members of the conservative House Freedom Caucus and moderate Rep. Tom MacArthur (R-N.J.) — will survive procedural challenges.
“That’s a good question that I don’t know the answer to,” he said. “That just shows that the House doesn’t operate under the same constraints we do and so we’ll have to work that out.”
The Senate rules are a problem for Republicans because they need to pass the bill repealing and replacing ObamaCare through a special budgetary process known as reconciliation.
The upside of this strategy is that it will allow them to pass it with a simple majority vote, instead of having to overcome the usual 60-vote threshold to get around a filibuster.
Republicans control only 52 seats, and there are not close to eight Democrats willing to vote for the GOP healthcare plan. That means using reconciliation is really the only option for getting a bill out of the Senate.
The drawback is that any legislation advanced on this track must pass a multi-part test known as the Byrd Rule, which requires that all provisions either change spending outlays or revenues — in other words, have an impact on the budget.
And the rule states that the budgetary impact cannot be merely incidental to the nonbudgetary components of the provision.
The Senate parliamentarian, Elizabeth MacDonough, who was appointed to the post by former Senate Majority Leader Harry Reid (D-Nev.) in 2012, will decide what does and does not pass the Byrd Rule.
So far, she has stayed out of the partisan fray in the Senate — not drawing any public complaints from either side of the aisle.
Earlier this year, conservative Sens. Ted Cruz (R-Texas) and Rand Paul (R-Ky.) suggested that Vice President Pence, who serves as the ex officio president of the Senate, ignore the advice of the parliamentarian if it is detrimental to passing the GOP healthcare bill.
But that idea has gained little traction with other Republicans.
There’s also doubt over whether the Senate parliamentarian will approve $138 billion in funding to set up high-risk pools for older, sicker Americans in states that opt out of ObamaCare’s insurance requirements. There’s partisan disagreement on this point, with Republicans saying it’s OK and Democrats saying it’s not.
Language scrapping the mandate on employers to provide health insurance if they have at least 50 workers and to count employees who work 30 hours a week as eligible for coverage could also face procedural objections.
On this point, Republicans note that the parliamentarian has ruled on the reconciliation bill that passed in 2015 that lawmakers could eliminate the penalty for not complying with the employer mandate, rendering it toothless.
The provisions allowing states to opt out of ObamaCare’s regulatory requirements — specifically the waivers related to pre-existing conditions and defined essential health benefits — have popped out as the most problematic under the Byrd Rule, according to Republican and Democratic experts.
“That one could be challenged. Here’s the reason: I don’t know that the [Congressional Budget Office] can say what a state would do,” said Bill Hoagland, an expert on the Senate’s reconciliation rules, who worked for former Senate Majority Leader Bill Frist (R-Tenn.) and served as Republican staff director of the Senate Budget Committee.
“They’re going to be hard-pressed to say whether states will take the opt out,” he added.
Hoagland explained that because it’s hard for the Congressional Budget Office to predict how states would react to the language, it’s very difficult to predict what the budgetary impact of the language would be. If it doesn’t score as saving or losing money, then it doesn’t have a more-than-incidental budgetary impact.
“If it has no score, then technically it would violate the Byrd Rule,” he said.
Hoagland, however, said he did not think the $138 billion in funding for high-risk pools or the scrapping of the employer mandate would be a problem — noting it would have a significant budgetary impact.
Former Sen. Kent Conrad (N.D.), the former Democratic chairman of the Budget Committee, disagrees. He said the insurance regulatory reforms, the set up of high-risk pools and the elimination of the employer-provided insurance rule are “ripe” for challenge before the parliamentarian.
“You’re not just raising revenue, cutting revenue, cutting spending or raising spending, you’re obviously doing something that has a heavy policy component,” he said.
“It would seem to me that’s ripe for Byrd Rule challenge. What the parliamentarian would decide, I don’t know,” he said. “It has such a heavy policy component.”
Sarah Binder, an expert in congressional procedure and professor of political science at George Washington University, highlighted the provisions allowing states to opt out of regulations for essential health benefits and pre-existing conditions and letting insurance companies charge a 30-percent penalty for lapsed coverage.
She said the insurance regulations seem to have “merely incidental” consequences for revenue and outlays and predicted “a challenge as well on the provision mandating the 30 percent surcharge paid to the insurance company for lapsed coverage.”