How 3 GOP Senators Could Stop Obamacare Repeal in its Tracks

How 3 GOP Senators Could Stop Obamacare Repeal in its Tracks

J.M. Guyon - Copyright 2013

Three prominent conservative senators – Rand Paul of Kentucky, Ted Cruz of Texas and Mike Lee of Utah – have threatened to derail the House approach to repeal and replace Obamacare unless it is radically overhauled. Because the Republicans hold a narrow 52 to 48 seat majority in the Senate, those three senators could stop the repeal movement in its tracks.

Not long ago, the only threat to moving ahead with the plan was seen as the possible defection of moderate Republican lawmakers and governors. But now, as House Speaker Paul Ryan (R-WI) prepares to push through a budget measure that would repeal much of the Obamacare law and garnish it with elements of a replacement plan, the real threat is coming from the far right.

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With broad support from outside conservative groups, including Freedom Works, Americans for Prosperity and Heritage Action for America, the three senators are taking a hard line. Their plan is similar to a measure passed by the Republicans in January 2016 that gutted every mandate, tax increase and subsidy in the ACA legislation, along with an I.O.U. to come back later with a fully defined Republican alternative. President Obama vetoed the bill, but the Republicans promised to pass it again after the November election.

Anything short of that, the three argue, would be a gross violation of the Republicans’ pledge to the country. Although the 2010 Affordable Care Act subsequently helped insure millions of Americans, President Trump and GOP leaders have denounced it as an abject failure.

“When you spend six years promising, ‘If only we get elected, we’ll repeal Obamacare,’ you cannot renege on that promise,” Cruz said on Friday in an op-ed in Politico. “Failure is not an option. Breaking our word would be a catastrophe. The voters would, quite rightly, never again trust Republicans to deliver on anything.”

Paul and Lee echoed those same sentiments this week. And beyond that is their disdain for the work going on in the House, where Ryan, Republican Majority Leader Kevin McCarthy of California and the top Republicans on the Ways and Means and Energy and Commerce Committees are feverishly working behind closed doors to devise a plan they can take to the floor within the next few weeks.

Related: A First for Obamacare: Majority of Americans Now Support It

The House Republicans are attempting to fashion a hybrid budget resolution that cherry picks the best of Obamacare – including a ban on insurers discriminating against people with pre-existing medical conditions and allowing children to remain on their parents’ health insurance policies until age 26 – while scrapping the rest in favor of more conservative, market-oriented measures.

Ryan got burned politically when an earlier version of the plan leaked out late last month at the start of a weeklong congressional recess and helped to fuel protests and acrimony at town hall meetings across the country. This time, he is treating the new version like a top secret under lock and key.

Paul mocked Ryan and the other House GOP leaders by presenting himself outside the door of a Capitol conference room on Thursday and demanding to be let inside to read the latest version of the Obamacare repeal legislation. House Democratic Whip Steny Hoyer of Maryland and other Democrats made a similar show of pique at being denied a peek at the evolving legislation.

“I’d like a copy of the bill,” Paul declared to a House GOP aide who came to the door, and to a group of reporters who gathered at the entrance. “If you’d recall, when Obamacare was passed in 2009 and 2010, [House Democratic Leader] Nancy Pelosi said you’ll know what’s in it after you pass it. The Republican party shouldn’t act the same way.”

Related: 8 Big Changes Under Tom Price’s Obamacare Replacement Plan

Paul never made it passed the door, but he and his conservative allies are not likely to approve of whatever eventually emerges from the room. Few details have slipped out so far about the shape of the newly revised GOP health care replacement legislation.

However, the House GOP plan is likely to include measures largely endorsed by President Trump in his address to a joint session of Congress Tuesday night. Those include interstate sales of health insurance policies; the greatly expanded use of tax-exempt medical savings accounts, creation of “risk pools” in every state to cover older, sicker Americans; changes to Medicaid coverage for the poor and some form of a federal tax credit that would replace the Obamacare tax subsidy that helps people cover their premium costs.

Vice President Mike Pence made a joint appearance with Ryan in the speaker’s hometown of Janesville, Wisconsin, on Friday, where he seemingly embraced Ryan’s approach to health care reform. "Let me make you a promise: the Obamacare nightmare is about to end," Pence declared.

Pence said he and Trump were working with Ryan and Senate Majority Leader Mitch McConnell (R-KY) to “put the finishing touches on our plan, even as this weekend rolls on.”

Ryan presented members of the House Republican conference with a timeline for action on Thursday that called for committee action beginning next week and passage of the budget resolution on the floor within three weeks.  If they manage to do that, the bill would then go to the Senate for uncertain action. But the question of how best to replace Obamacare’s income tax subsidy for lower income Americans is proving to be one of the biggest stumbling blocks to a compromise among Republicans in both chambers.

Related: Boehner ‘Started Laughing’ When Republicans Vowed to Replace Obamacare

Ryan and Tom Price, the former House Republican member and now secretary of health and human services, have long favored a “refundable” tax credit that would be available to all Americans – but one based on age rather than income. Under Obamacare, eligible individuals and families with low or moderate income receive a refundable tax credit to purchase health insurance on government-run exchanges. That means that people who pay little in federal taxes could still qualify for premium support.

Price, the former House Budget Committee chair, pioneered a substitute fixed refundable tax credit. This one is pegged to a person’s age rather than their income and can be used to buy their insurance policies in the private market. Those tax credits would be fairly modest, ranging from $1,200 a year for people 18 to 35 years of age to $3,000 for those 51 and older. In many regions of the country, that would hardly begin to cover the premiums for a relatively comprehensive health insurance plan. Ryan tweaked that approach by providing a credit of up to $4,000 a year.

But many conservative Republicans have opposed refundable tax credits of any stripe. That’s because people with lower incomes, who pay less in income taxes, receive the full credit even if it exceeds their tax bill. The non-refundable credits may be used only to offset actual tax liability.  Some say they oppose the refundable tax credit idea because it is tantamount to a new government entitlement, like Medicare or Medicaid, by allowing Americans to receive a larger credit than they pay in taxes.

"We are sending federal assistance in a newly created method that somehow we think will work better than what we've had” in Obamacare, Rep. Mark Meadows, chair of the Freedom Caucus, said.

Rand Paul and Rep.  Mark Sanford (R-SC) have offered an alternative backed by the conservative House Freedom Caucus that provides an individual tax break that can’t result in a refund. But without a refundable credit, low-income people would be left out in the cold.