Senate Rejects Proposals to Repeal and Replace the ACA

Early in the morning on Friday, July 28, 2017, the Senate, by a vote of 51-49, rejected the Health Care Freedom Act (HCFA), or “skinny repeal” of the ACA, which was the last-ditch effort of Senate Republicans to repeal and replace the ACA. In dramatic fashion, three Senate Republicans voted no on the measure, including Lisa Murkowski (AK), Susan Collins (ME) and John McCain (AZ), who cast his vote with an emphatic thumbs down. Sen. McCain appeared to be the difference-maker as he returned from his home state to the Senate floor just days after having announced his diagnosis with brain cancer. His “no” vote spelled defeat for the HCFA, as all Democrats and Independents voted no as well.

The week leading up to the vote brought all sorts of political twists and turns as Senate Republicans attempted to garner enough support to keep the ball on ACA repeal and replace moving forward. On Tuesday, McCain appeared to be the Republican hero, as he voted in favor of starting the Senate ACA repeal-and-replace debate. His vote, along with Vice President Pence’s tiebreaking vote, began 20 formal hours of debate on amendments to the American Health Care Act (AHCA, which is the version of ACA repeal and replace passed by the House back in June).

During the debate, the Senate also rejected the Better Care Reconciliation Act (BCRA, which was the Senate’s original ACA repeal-and-replace proposal), a 2015 bill that sought total repeal of the ACA, and several other amendments (including one relating to support of a single payer system). That all led to the last-effort vote on the HCFA, the actual text of which was not released until late on the evening of July 27, just hours before the final vote. The HCFA would have repealed only portions of the ACA (hence the “skinny repeal”), including the individual and employer mandates. The HCFA also included a provision giving states more flexibility through waivers. Senate Republicans who supported the HCFA had hoped they could pass the measure and then go to conference with House Republicans to come up with a final proposal that would go further in repealing and deeper in replacing the ACA. The votes of Sens. Murkowski, Collins and McCain dashed those hopes.

Following the vote, Senate Majority Leader Mitch McConnell (KY) expressed disappointment in the result, while Senate Minority Leader Chuck Schumer (NY) expressed relief. Both articulated interest in visiting a bipartisan approach for future discussion. Other congressional leaders also weighed in, including House Leader Paul Ryan, who expressed disappointment. President Trump tweeted to “let Obamacare implode, then deal.”

Looking forward, it appears the GOP effort to repeal and replace the ACA is dead, at least with respect to the budget reconciliation process. Republicans had hoped to use that process since it requires only a simple majority of 50 votes rather than the normal supermajority of 60 votes. It’s unclear how Republicans might proceed from here. There is the possibility of future legislation aimed at repealing and/or fixing the ACA, although those efforts would now require Democratic involvement and support. Already, though, senators and other members of Congress are presenting different ideas, both to the public and to the White House. Some potential bipartisan ideas include continued funding of the ACA subsidies, expanding state innovation waivers, allowing carriers to sell catastrophic coverage, fixes to reinsurance programs to help with high-cost enrollees and piecemeal changes to the ACA.

In addition to continued discussion in Congress, the Trump administration will also have to decide how they’ll enforce the ACA, particularly considering Trump’s executive order that asks federal agencies to relieve the burdens associated with ACA compliance. While the administration could perhaps relax or simplify some ACA rules, it couldn’t likely ignore enforcement altogether without the risk of some type of litigation.

For employers, the ACA remains the law of the land, as it has throughout this entire process. This means employers should continue with their compliance efforts, including (among other things) tracking hours and offering affordable coverage under the employer mandate, keeping records for related reporting and making PCOR and reinsurance payments that are due in 2017.

As always, we will continue to monitor the situation and report on developments. In the meantime, please reach out to your NFP advisors and client service teams for additional support.