It’s about to get wonky.
There is speculation in Washington that House leadership might have to work some magic on its health care bill — again.
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New reports indicate the bill as passed might run afoul of the complex Senate rules Republicans are using to pass the legislation without any Democratic votes. And if that were to happen, it would probably be because House Republicans rushed their bill through, adding provisions at the very last minute, and passed it without an official analysis of what it would do and cost. They faced heavy criticism for that at the time, and these new developments suggest it might be a major problem for the bill.
Bloomberg reported on Thursday evening that the House had not actually sent their legislation to the Senate yet, even though it passed a couple weeks ago — and that was because they were waiting for the official analysis from the Congressional Budget Office.
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Depending on what the CBO says, the House might have to change the American Health Care Act and pass it again or even start over, according to Bloomberg.
Experts have wondered if the House bill would work under the Senate’s rules, which are supposed to restrict a bill considered under “budget reconciliation” to make sure it affects only federal spending and revenue. If those strict conditions are met, then the Senate can advance a bill with just 50 votes. Republicans are using that process because otherwise Democrats could block the legislation.
Provisions in the bill that affect insurance regulations, for example, have been suspect for a while, according to budget and procedure experts. Those wouldn’t seem to affect government spending directly.
But new issues are cropping up on Thursday night, sowing doubts about the Republicans’ bid to repeal and replace Obamacare. We won’t know for sure until CBO releases its updated report, which is expected next week, and it may prove to be much ado about nothing. But it’s worth breaking down the issues, given the stakes.
If the House bill did pass, CBO previously projected that 24 million more Americans would be uninsured and Medicaid spending would be cut by $840 billion over the next decade. If these predictions of procedural problems prove true, the Republican pledge to repeal Obamacare could be in jeopardy.
One issue is pretty simple; the other is more complex. Here goes.
A last-minute tweak to the AHCA could lead to more people buying insurance and too much federal spending
This one is pretty straightforward: The GOP’s health care bill must save at least $2 billion under these complex Senate rules, which Vox’s Sarah Kliff outlined. It is at least plausible that one last-minute tweak to the bill would violate that requirement.
House Republicans added a provision in their bill that allows states to waive certain Obamacare regulations, such as the prohibition on health plans charging sick people more than healthy people and the requirement that they cover certain services, with some conditions.
Those waivers could lead to skimpier plans and/or lower premiums — which could, in turn, actually lead to more people buying insurance and using the tax credits from the federal government that the Republican bill creates to do so.
It depends on a lot of different factors: How many states would actually want one of these waivers, and how many people would be expected to buy coverage?
But it’s at least possible this provision could cost too much. The most recent CBO analysis of the House bill, released before the waivers were added, projected that the legislation would save $150 billion.
The Committee for a Responsible Federal Budget, a group of budget experts who are pretty smart about these things, estimated that if 10 million more Americans were projected to buy insurance now, after the waivers were added, the bill would suddenly cost $115 billion.
So the revised bill would break the Senate rules, because it costs money instead of saving it. That’s potential problem No. 1, though it depends on some unpredictable variables, like how many states would take a waiver, that CBO could struggle to project.
Last-minute funding added to the House bill could also be a problem
This is going to get wonky. The bill needs to save $2 billion under the Senate rules, but it’s really more complicated than that: Two different Senate committees actually need to save $1 billion each through changes to policies that fall under their jurisdictions. The Senate Finance Committee needs to save $1 billion, and the Health, Education, Labor and Pensions Committee needs to save $1 billion.
Most of the bill’s major provisions — the tax credits and the Medicaid overhaul — fall under the Finance Committee’s jurisdiction. But the health committee is going to claim a few policies as its own.
According to CRFB, those could include the repeal of Obamacare’s public health and prevention fund, the repeal of the law’s cost-sharing reductions, and the creation of a “stabilization fund” for states to reform their insurance markets.
The House ended up pumping more money into the stabilization fund at the last minute to win over moderate members who were worried about too many people losing their insurance — so much money that, by some expert estimates, the bill might not achieve the $1 billion for the health committee that it needs to.
Here’s the math that CRFB’s Ed Lorenzen, the group’s resident budget expert, laid out to me on Thursday evening, which could suggest the House bill is in trouble:
- Repealing the Prevention Fund saves $9 billion.
- Repealing the cost-saving reductions saves $103 billion.
- Creating the stabilization fund originally cost $80 billion.
- Adding the last-minute money to the bill costs up to $38 billion.
So if you add up the savings and the costs, the provisions under the health committee’s jurisdiction could cost $6 billion, by these estimates. That would again put the bill in violation of the Senate rules, which require $1 billion in savings.
It depends on a few things, as Lorenzen freely acknowledged. Republicans might quibble with whether those provisions really belong under the health committee’s jurisdiction, or CBO might decide the new money won’t be fully spent.
Presented with those numbers, House aides nonetheless projected confidence that their bill would pass muster, because of how the different policies in the bill interact with each other.
And that may very well end up being true.
But it’s a new wrinkle in the GOP’s roller-coaster ride to repeal Obamacare. Fixing those problems — by, for example, reducing spending for the stabilization fund — presents political, practical, and possibly still procedural problems.
It all combines to make next week’s CBO report a little more dramatic.
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