[Update] Uncertainty Remains Following a Volatile Week for Repeal and Replace Efforts
Update: On Tuesday, July 25, the U.S. Senate passed a procedural motion to allow debate to begin on the American Health Care Act, the legislation passed in May by the U.S. House of Representatives to repeal and replace the Affordable Care Act (ACA). The vote was 50 to 50, with Vice President Pence casting the tie-breaker vote. Two Republican Senators joined all the Democrats in voting against the legislation. The procedural vote is not indicative of blanket support from the Republican caucus as it is still unknown which direction the Senate will take the legislation. At this juncture, three distinct alternatives have been proposed to amend the House legislation:
- Repeal/Replace utilizing the draft legislation proposed in the Senate, the Better Care Reconciliation Act (BCRA). On the evening of July 25, in a 43 to 57 vote, the Senate voted down a revised version of BCRA.
- Repeal/Delay with Obamacare Reconciliation Repeal Act (ORRA) – this would utilize 2015 repeal legislation as a base.
- Recently introduced strategy: Skinny down Repeal version – repeal limited items that the Republican caucus agree on and decide later on more robust health care reform. It is believed that this proposal would include a repeal of the employer shared responsibility provision, the individual mandate, and medical device tax. However, there is not a draft as of yet of this proposal.
What happened this week?
The repeal and replace efforts have had a volatile week. At the start, two additional Republican Senators announced their opposition to the Better Care Reconciliation Act of 2017 (BCRA), bringing the total number of “no” votes above the number Republicans needed to advance the legislation. In response, Republican Senate Majority Leader Mitch McConnell acknowledged that he lacked the votes to pass the BCRA. He announced that the Senate would, instead, vote on a repeal of various provisions of the Affordable Care Act (ACA) without putting forward a replacement. Senator McConnell proposed using the repeal bill from 2015. This bill would go into effect after two years to allow time for a new system to be created.
Shortly after the announcement of the new strategy, three GOP senators said that they would not support moving this bill to the floor, essentially creating a roadblock for the path forward. Some experts disagree with this “repeal, then replace” approach, as it creates uncertainty in the health care markets. Several different strategies to proceed were proposed within the course of the week. In addition to repeal/replace and repeal/delay, other directions include taking no action or working in a bipartisan fashion to fine-tune the current ACA.
Later in the week, the Congressional Budget Office (CBO) issued analyses on both the revised BCRA and the Senate Republican repeal-and-delay bill, called Obamacare Repeal Reconciliation Act of 2017 (ORRA). The analysis on the revised BCRA did not differ significantly from its analysis of the original bill. Note that the analysis did not include the controversial Cruz Amendment.
What is the current plan?
Quite frankly, no one knows.
Senator McConnell has said that a procedural vote to start debate on legislation will take place next week. The procedural vote should not be confused with a vote on the legislation. It remains to be seen which legislation the Senate will be voting to advance. If they move forward with the repeal/replace bill, it most likely would be amended to appease the various factions in their caucus. At that juncture, it may be necessary to have the CBO rescore the amended legislation.
If the procedural motion passes, it is unknown what the final legislation will look like, or whether it can surpass the hurdles of budget reconciliation. Also, remember that if and when the Senate passes a bill, it must be reconciled with the bill that passed the House of Representatives in May. Until the House and Senate pass the same bill and the President signs it, there are no changes to the ACA.
What is the impact for businesses?
Employers must remember that this does not change anything at this point. The ACA and all its provisions still continue to be the law of the land, including employer shared responsibility provisions. The bottom line is this process is fluid and it’s important to stay compliant with the current law. Keeping informed of where the process stands is critical, but it’s vital to understand that at this juncture it is unknown if this legislation will make it successfully through Congress, and if it does, what the final form may contain. We will continue to monitor for any changes or movement through Congress.