After months of divisive debate, Republicans finally acknowledged on Tuesday that they will be unable to repeal and replace the Affordable Care Act during the Trump administration’s first year. Now they’ll focus on tax reform, as the next step on health care—whether it’s another shot at repeal or a grudging move toward bipartisan compromise—moves to the back burner.
“We’re coming back to this after taxes, we’re going to have time to explain our concept, we’ll have a better process, and we’re going to take this show on the road,” Sen. Lindsey Graham said after a caucus lunch Tuesday.
Despite Graham’s optimism, it’s not clear if the latest failed repeal effort—a bill by Graham and Sen. Bill Cassidy that would give states the authority to undermine or scrap Obamacare’s consumer protections while turning marketplace subsidies and spending on Medicaid expansion into a block grant—can ever be revived.
Some lawmakers have floated using the fiscal 2018 budget resolution to carry both health care and tax reform, giving Republicans another chance to repeal Obamacare with a simple majority, but this could prove perilous to both goals.
“Heavens no, we’re not going to do that,” said Senate Finance Committee Chairman Orrin Hatch. “We’re not going to do that; it would just screw up the whole thing.”
Attempting to take on tax reform and a health care overhaul would further complicate two already-difficult goals for the party to attain. “If health care by itself was too controversial, imagine how difficult it will be to combine health care and tax reform,” said Stan Collender, executive vice president of Qorvis MSLGROUP and a former staffer for the House and Senate budget committees.
Collender said that both tax reform and changes to the Obamacare taxes would have to be in one bill, where “one overcomplicates the politics of the other.” He suggested instead keeping the two separate by leaving tax reform in the fiscal 2018 budget resolution, and then immediately moving on to the 2019 budget resolution to make substantial changes to health care.
Whenever the issue might resurface, the recent health care debate showed divisions within the party that are not easy to bridge. On one side are moderate Republicans who have concerns about deep cuts to Medicaid and the generally partisan process; on the other side are more-conservative lawmakers who want spending slashed even further.
The constant debate to repeal Obamacare, along with White House actions to deeply reduce funding for Obamacare outreach and not fully commit to key insurance payments, has left the marketplaces in a state of uncertainty. Insurers have to sign final contracts to participate in the Affordable Care Act exchanges Wednesday.
Before Republicans started racing to get Graham-Cassidy passed, Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander and ranking member Patty Murray were attempting to piece together smaller bipartisan legislation to stabilize the marketplaces. Broad strokes of the legislation included cost-sharing-reduction payments to insurers and making Obamacare state innovation waivers, which allow states to change some of their marketplace policies, more flexible.
Murray has pressed for bipartisan discussions to continue. A Senate Democratic aide said that Murray had given Alexander a lot of what he wanted, including allowing catastrophic plans to be sold to more people and making it easier for states to attain waivers that will let them make changes to their marketplaces.
But returning to this work in the near-term would be extremely challenging. “We stopped bipartisan talks last week because my goal wasn’t just to get a bipartisan agreement, it was to get a bipartisan result,” Alexander told reporters. “And I didn’t see any way to get one in the current political environment. That environment hadn’t changed. Maybe [if] it does change, but it hasn’t yet, not today.” But after Graham-Cassidy was pulled, Alexander released a statement saying he would try to find consensus on a limited bipartisan plan.
Significantly, neither Senate Majority Leader Mitch McConnell nor House Speaker Paul Ryan has shown much interest so far in Alexander’s bipartisan approach.
McConnell tweeted Monday: “Senate Ds have 2 thoughts on how to fix #Obamacare 1. Do nothing 2. A fully gov-run system that would take away even more of their decisions.” And Ryan would be wary of bringing a bill to the House floor that would be opposed by so many of his conservative members.
But Sen. John Thune is urging Murray and Alexander to resume their efforts. “I think they should and I hope they will,” he told reporters Tuesday. “You know there are going to be some things that in the near-term may have to be done to stabilize markets.”