On July 17, 2017, Republican efforts to enact their Better Care Reconciliation Act collapsed as GOP Senators Mike Lee of Utah and Jerry Moran of Kansas announced that they would not support the legislation. Senators Rand Paul (R KY) and Susan Collins (R ME) had already announced their opposition, while Senator John McCain (R AZ) remains hospitalized in Arizona, leaving the Republican leadership at least three votes short of the 50—with Vice President Pence’s tiebreaking vote—they need to pass the bill.

Following the announcement by Senators Lee and Moran that they could not support the BCRA, Senate Majority Leader McConnell reportedly announced that he was prepared to call up the House AHCA and replace it with a “repeal and delay” amendment. The amendment would not completely repeal the ACA, a step that would reopen the Medicare prescription drug doughnut hole, undermine fraud and abuse enforcement, and probably throw Medicare provider payments into chaos. Rather, the amendment would repeal the specific provisions of the ACA that were included in the 2015 budget reconciliation bill that passed both the House and Senate and was vetoed by President Obama.

The 2015 repeal legislation would have ended the ACA’s individual and employer mandate penalties immediately. It would have also repealed the ACA’s Medicaid expansions, premium tax credits and cost-sharing reduction payments, and small business tax credits, but would have delayed the repeal for two years. It is unlikely that the Senate could repeal the ACA’s insurance reforms because of the Byrd rule.

The 2015 repeal legislation would have repealed the taxes imposed by the ACA, at a cost of $1.2 trillion. Repeal of the taxes would leave Congress without revenue to fund replacement legislation. A Congressional Budget Office analysis of the bill projected that it would lead to an increase in the uninsured of 18 million the year after enactment and 32 million by 2026. Premiums would immediately increase 20 to 25 percent and double by 2026.

The repeal and delay strategy assumes that congressional Republicans would be able to come up with a replacement strategy within two years, but Republicans have had seven years to craft an ACA replacement and have manifestly failed to do so. And as a practical matter the GOP would not in fact have two years to come up with a new approach—it would have to happen almost immediately to allow time for the administration, and probably the states, to implement the new program administratively. In the meantime, health insurance markets, already in tenuous condition in some states because of ongoing uncertainty, would almost certainly collapse.

In 2015, Republicans had a 54 vote majority in the Senate. Two Republican senators, Kirk (IL) and Collins (ME), voted against the repeal. Senators Capito (R WV), Collins (ME) and Murkowski (AK) immediately announced they opposed repeal without replacement, dooming this strategy

Alternatively, Republicans in the Senate could work together with Democrats to find at least a short-term bipartisan solution. Democrats have indicated a willingness to work with them. There is wide public support for bipartisan reform. And there are short term fixes that could be adopted on a bipartisan basis, as I have noted elsewhere. The CHIP program is currently set to expire at the end of September, and a CHIP reauthorization bill would be an obvious opportunity to enact fixes for the individual insurance market, such as creating a reinsurance program (which the Senate BCRA was going to fund through CHIP).

It is time to set aside partisanship, to fix immediate problems in insurance markets, and to begin a national debate on what we want our health care system to look like going forward.

States Continue Efforts To Intervene In Cost-Sharing Reduction Payment Litigation

On July 17, 2017, the attorneys general of seventeen states filed a reply brief in support of their motion to intervene in House v Price. This is, of course, the appeal of a lower court order enjoining the administration from reimbursing insurers for reducing cost sharing for low income exchange enrollees until Congress adopts a specific appropriation for the cost sharing reduction payments (CSRS). Attorneys general from fifteen states and the District of Columbia filed the motion to intervene on May 18. Since then attorneys general from Virginia and North Carolina have also petitioned to join them. Attorneys for the House of Representatives and the Trump administration filed briefs opposing the intervention request on July 10.

The states reiterate their arguments as to why their presence is needed in the litigation to defend what they view as the current law regarding the funding of the CSRs, which the Trump administration seems unwilling to defend. The states allege that the House and administration are engaged in a collusive strategy to undermine rather than to clarify or implement the current law, and that the House and administration are taking advantage of the court’s willingness to hold the litigation in abeyance to accomplish this scheme.

In response to the Trump administration’s arguments against intervention, the states note that both the President and Attorney General have made statements casting doubt on the administration’s willingness to defend the CSR payments. The nearly eight months that the court has delayed the litigation has not resulted in settlement, but rather in a further deterioration of individual health insurance markets, causing harm to the states. The ACA repeal efforts currently being considered by Congress may not resolve the issue addressed by the litigation, and the outcome of the legislative efforts at this point is purely speculative.

The states point out that while the Trump administration argues their intervention is premature while settlement discussions are underway, the House argues that their intervention is too late, as they should have intervened right after the election. The states claim they intervened as soon as it became clear that the Trump administration was not going to defend the CSR payments.

The states forcefully reject the House’s contention that they will not be injured if the appeals court upholds the lower court’s order and the CSR payments ceases. They note the damage that the administration’s ambivalence on the CSR payments is already causing their insurance markets, for which they have regulatory responsibility. The House contended that any injury the states’ hospitals suffer from increased obligations to treat the uninsured care can be avoided by their simply foregoing Medicare payments and thus evading the obligation under federal law to provide emergency care to uninsured people. In response, the states tellingly cite the Supreme Court’s NFIB Medicaid decision—to put states to the choice of either losing Medicare funding or accepting a greatly increased uncompensated care burden is “economic dragooning that leaves the states with no real option but to acquiesce,” to quote the Supreme Court.

The states note that an appellate court decision that the House has no standing to sue—a quite likely result of the appeal—would prevent the district court’s injunction from going into effect. A ruling by the appellate court that there already is an appropriation for the CSRs would obligate the administration to pay them. Of course, in the absence of a judgment reversing the lower court’s holding on the merits, the administration can at any time stop making the CSR payments, as it has threatened to do. The states would have to bring a separate action to compel payment.

An unfavorable ruling on the merits in the appellate court, however, would make it much harder for them to successfully bring such an action. The states’ presence in the current litigation to defend the CSR payments is thus urgently necessary.