The Wrinkle in the GOP’s Obamacare Repeal Plan

A bill that would allow Republicans to repeal the pieces of the Affordable Care Act they hate the most with only a simple majority in the Senate may be a nonstarter in its current form.

The bill, which also defunds Planned Parenthood for one year, was always headed straight to President Obama’s veto pen. But because of issues that may violate a complicated Senate budget rule, the version of the House Ways and Means reconciliation bill that passed through committee along partisan lines on Tuesday would likely require Democratic votes on some provisions for them to make it out of the upper chamber.

While it’s extremely unlikely that even a single Democrat will break from party lines on an Obamacare-repeal vote, the provisions in question are actually pieces of the law that some Democrats would also like to see repealed.

Reconciliation is a budget procedural tool that allows the majority party to pass legislation in the Senate with only 51 votes; the support of minority members would not be needed to send a bill out of Congress. Republicans this week began marking up reconciliation legislation in three different House committees that, when merged into one bill, will gut major pieces of Obamacare and defund Planned Parenthood for a year. The point is to send a message about what can be accomplished if and when a Republican president is in the White House.

The Ways and Means reconciliation bill repeals the Affordable Care Act’s individual mandate, employer mandate, “Cadillac” tax, medical-device tax and Independent Payment Advisory Board.

But reconciliation is subject to what is called the Byrd Rule, which prohibits the Senate from considering “extraneous matter” as part of a reconciliation bill. While there are many tests for matters to be considered extraneous, the problem in this case is that the Ways and Means bill would increase the deficit after 10 years, according to Ed Lorenzen, a senior adviser at the Center for a Responsible Federal Budget. The problematic pieces are the Cadillac tax, medical-device tax and IPAB repeals, which all bring in revenue. The CRFB estimates the package would increase deficits in the second decade by around $500 billion.

“The exact amount of the deficit impact is uncertain, but the direction of the impact is pretty clear. The costs of the items that would be repealed are growing much faster than the savings in the bill,” Lorenzen said.

And that means Democratic votes would be needed to hit the 60-vote threshold necessary to waive the Byrd Rule for those provisions, which isn’t going to happen. A senator can raise a “point of order” against each provision in violation, and if there are not 60 votes to waive the point of order, the provision is removed from the bill and the rest of the bill can move forward.

Yet there are Democrats in both chambers who want to repeal the taxes, and even Hillary Clinton came out on Tuesday in opposition to the Cadillac tax. But Democrats won’t vote for repeal while it’s attached to a bill that attacks the parts of the law that they support.

“No,” said Sen. Debbie Stabenow when asked if she would support the repeals in such a situation. “It’s going to come to us, and as long as it’s part of this big package, even if it was voted on as amendment and then put into the package or something, no.

“If they were stand-alone, there’s certainly a willingness,” she added. “I want to fix the Cadillac tax. I would vote for addressing the medical-device tax in a way that is responsible—fiscally responsible. But not as part of reconciliation.”

Sen. Jeanne Shaheen, who supports repealing both taxes, when asked about the fact that both provisions were included in the reconciliation bill, quickly pointed out that “so is defunding Planned Parenthood, so I don’t support that.”

Lorenzen said Republicans do have another option to get all of the reconciliation pieces passed without Democrats. They could sunset the repeal in 2025 (the point at which the repeals are estimated to begin adding to the deficit), which would essentially mean delaying the implementation of the Cadillac tax, medical-device tax, and IPAB until 2026.

“But more likely, they could bring the bill to the floor, force Democrats to raise a point of order against each of those provisions, and try to get Democrats who support repealing those provisions to vote to waive the Byrd Rule,” he said. “But that vote will be framed as voting to allow a provision that would increase the long-term deficit, which allows members to say they would support repeal if it didn’t make the deficit worse.” Many Democrats have said they will not support a repeal of the medical-device or Cadillac tax that is not offset.

When asked about the situation, Republicans seem to be under no illusion that Democrats would come to their side.

“I would guess if anything is done through reconciliation that messes with any part of Obamacare, [it] would be hard … for a lot of Dems to be for it," said Sen. John Thune, the No. 3 Republican in the chamber. "But I don’t know how they explain that, because the medical-device tax is something where they’ve had well north of 60 in favor of the repeal, and the Dems are very much on board with getting rid of the Cadillac tax.” 

Thune said Senate Republicans are trying to get a reconcilable bill out of the House to avoid Byrd issues in the first place.

All of this drama highlights how sticky the politics of the Affordable Care Act still are five years after its passage. But it also may delay any reforms of the law that had already been in the works.

Earlier this month, Democratic aides expressed concern with cosponsoring Sen. Dean Heller’s Cadillac-tax-repeal bill because it could, they say, later be used as a messaging attack against the law as a whole. They were particularly interested in seeing whether Republicans included the Cadillac tax in a reconciliation repeal package, saying that if they did, it proved repealing the tax was contributing to a larger attack against the law and added to Republicans’ supply of rhetorical ammunition against Obamacare. Although Heller initially struggled to find a cosponsor on the other side of the aisle, Sen. Martin Heinrich eventually signed onto the bill.

But Shaheen said that despite the contents of the reconciliation bill, she’d still like to keep working in a bipartisan way on changes to the law.

“When I supported the Affordable Care Act, I recognized that it was going to need changes as it got implemented and we needed to see what was working and what wasn’t working, and try to make those changes. I think it would be helpful for the Republicans to work with us to do that,” Shaheen said.

Several Democrats, led by Sen. Sherrod Brown, introduced legislation last week that would repeal the Cadillac tax but require a pay-for. And Clinton’s opposition to the tax came with the caveat that her other health care policy proposals, released last week, would offset the revenue the tax is expected to generate.

Sen. Amy Klobuchar and four other Democrats have cosponsored a bill introduced earlier this year by Sen. Orrin Hatch that repeals the medical-device tax.

When asked about potential Byrd violations, Ways and Means spokesman Brendan Buck said the bill does not increase deficits after 10 years.

“There is no [Congressional Budget Office] score yet, but we are confident we will put a bill on the president’s desk,” Buck said.