July 19, 2017

Last week, Senate Republicans unveiled their latest draft of their health reform bill, the “Better Care Reconciliation Act” (BCRA), and prepared to vote as early as this week on revised legislation to “repeal and replace” the Affordable Care Act; by last night, that bill and prospects for pivoting to “repeal and delay” through reconciliation fell apart. As the Senate picks up the pieces and contemplates next steps on health care, a quick recap on how we got here:

MCCAIN SURPRISE – After the latest bill was released, a surprise announcement came from Sen. John McCain’s (R-AZ) office over the weekend – he had surgery and would be unable to return back to DC for at least a week. This imperiled Senate Majority Leader Mitch McConnell’s (R-KY) ability to get to 50 votes for reconciliation, with Sen. Susan Collins (R-ME) and Sen. Rand Paul (R-KY) already announcing their opposition to the bill over the weekend and little room to spare, a vote that could have occurred this week tentatively pushed to the week of July 24th.

LEE AND MORAN JUMP TOGETHER – After the initial release of the bill, key Senators who had opposed the previous version (Heller, Murkowski, Portman, Capito, Cruz, Lee, Hoeven, and Moran) did not immediately announce their opposition, as the latest version was meant to address some of their concerns. It was widely realized that a single announcement of opposition could fully sink the bill even once Sen. McCain returned. Sens. Jerry Moran (R-KS) and Mike Lee (R-UT) took the plunge together Monday evening and both issued statements opposing the latest version of the bill.

MELTDOWN – With Sen. McCain gone, and four Senators now opposed (Collins, Paul, Moran, and Lee), the latest version of the bill was dead. In response, Majority Leader McConnell shifted to a new strategy – he announced he would offer as the first amendment during reconciliation debate, the 2015 repeal bill that was approved by the Republican Congress but vetoed by President Barack Obama. Nearly all Republican Senators who were in office at the time voted for this bill, except for Sen. Collins.

NAIL IN THE COFFIN? – Moving forward with the latest plan would require a successful Motion to Proceed vote and accepting the amendment of “repeal with delayed replace” via reconciliation. However, three Republican Senators announced their opposition to this plan – Sens. Collins, Shelley Moore Capito (R-WV), and Lisa Murkowski (R-AK), effectively killing prospects of a successful Motion to Proceed.

DATE WITH DESTINY – Majority Leader McConnell has announced that the Senate will still hold a vote next week on the Motion to Proceed to the reconciliation bill, even though the vote is expected to fail. Watch for Senate Republicans and the President to put pressure on the hold out votes to support this effort. Ultimately, it is likely to fail.

President Trump encouraged Senators earlier today over lunch at the White House to continue working to find agreement on ACA repeal and replace, even if it takes all of August. In the meantime, Sen. Alexander and others have indicated an interest in holding hearings on market stabilization proposals, while Leader McConnell has raised the prospect of working with Democrats on a bipartisan compromise. With varied reactions to the prospect of failure on such a signature issue, the path forward remains uncertain and most likely leads towards a renewed focus on comprehensive tax reform.

Also today, the Senate Budget Committee posted the latest draft bill from Senate Republicans. The motion to proceed vote could occur as early as Tuesday, barring any breakthroughs in tonight’s last-ditch summit of hold out senators.

The bill, the Obamacare Repeal Reconciliation Act (ORRA), is available here and a section-by-section summary is available here. It is our understanding that this bill, which is significantly shorter than other draft bills, reflects Majority Leader Mitch McConnell’s plan to try to move forward with a “repeal and delayed replace” strategy consistent with the 2015 effort.

This draft repeals tax provisions in the Affordable Care Act, ends premium tax credits at the end of 2019, and ends the Medicaid expansion at the end of 2019. Additionally, it includes funding for Cost Sharing Reductions through the end of 2019, increases funding for Community Health Centers, and includes $750 million per year for FY 2018 and FY 2019 for substance use disorder and mental health treatment.

BACK TO THE DRAWING BOARD – The Senate Budget Committee has posted an updated version of the Better Care Reconciliation Act. The latest version is available here, along with a section-by-section summary here.

**The only notable distinction with version 3.0 is that it does NOT include the Cruz-Lee amendment language previously included under Title III. Pgs 94-97 does contain some minor technical corrections on restrictions regarding state allotments and increased FMAP for payment adjustments, but everything else remains the same as the July 13 version.**

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