Does the Senate GOP’s Obamacare Repeal Bill Actually Repeal Obamacare?

Senate Majority Leader Mitch McConnell of Ky., listens to a reporter's questions during a newsmaker interview at the Associated Press bureau in Washington, Tuesday, Mar. 21, 2017.  (AP Photo/J. David Ake)
J. David Ake/AP

Conservatives skeptical of the Senate GOP’s recently unveiled Obamacare repeal bill, which could be voted on this week, have claimed that it does not really repeal the Affordable Care Act.

Sen. Rand Paul (R-KY) has called in “Obamacare-lite.” Sen. Mike Lee (R-UT) argued its “far short of “repeal” and “keeps the Democrats’ broken system intact.” The fact that conservatives believe the Senate bill, the Better Care Reconciliation Act, doesn’t go farther to dismantle the ACA is driving a far-right revolt that may threaten the passage of the bill.

For Republicans who, for the better part of the decade, ran on repealing the law “root and branch,” the designation is more than just semantics. For them, the legislation currently being considered represents the GOP’s last, best shot to overhaul the health care market, and turn back the clock on the strides the ACA made towards a more progressive, government-supported system. It was a concern raised about the House bill, the American Health Care Act, as well, even after it passed.

The question of whether the Senate bill, which largely follows the model of the House health care legislation, really repeals President Obama’s signature legislative achievement may depend on how you define Obamacare in the first place.

The individual mandate is gone—sort of—under the Senate plan

Even before the legislation was unveiled, some Senate Republicans were arguing that as long as the individual mandate was repealed, Obamacare was as good as dead to them.

“Eliminating the individual and the employer mandate is the end of Obamacare. The notion that you have to be compelled to buy something because you’re breathing is something we find antithetical to our cause as conservatives,” Sen. Tim Scott (R-SC) told reporters earlier this month.

Indeed, the draft discussion released Thursday repealed the tax penalty for individuals and certain employers for not participating in a comprehensive health insurance plan. The mandate was a driving force of the anti-Obamacare protests that raged since its implementation, and the subject of a Supreme Court case that could have destroyed the law, had the justices not ruled in the Obama administration’s favor.

However, a revised version of the Senate GOP legislation released Monday established a new penalty in its place, as a health care experts say the original draft bill would have tempted a death spiral-style meltdown if there was no incentive for health people to buy insurance. The penalty is known as a continuous coverage requirement, and would lock out individuals from the insurance market for six months if they failed to make a payment.

Other key Obamacare provisions survive in the Senate bill, but are watered down.

As they invoke a lesser version of Obamacare’s individual mandate, Senate Republicans are also maintaining some of its other provisions, even the ones they have previously criticized, though they watering them down as well.

The “top-down system” of “Washington” “one-size-fits-all” regulations that conservatives have endlessly bemoaned would continue under the Senate bill, as would Obamacare’s insurance subsidies, though in a less generous form than the ACA. The Senate bill makes some tweaks around the edges of Obamacare’s insurer mandates, by letting insurance companies charge older consumers more and by incentivizing skimpier plans.

But Obamacare’s ban on insurers discriminating against consumers on the basis of pre-existing conditions is preserved under the Senate bill, at least in theory.

The Senate bill does offer states a MASSIVE loophole to kill Obamacare.

The Senate legislation leaves a giant back door for states to destroy Obamacare on their own. The waiver option for states to make changes to ACA regulations operates within a section of the original law known as 1332. However the Senate bill guts the ACA’s requirements that states seeking the waivers achieve the same goals as Obamacare in terms of coverage numbers, affordability and comprehensive plans.

Under the Senate plan, a state would only need to show that opting out of ACA requirements would lower the federal deficit, at which point the Health and Human Services Department would be obligated to grant the waiver, no matter what other effects it had on the state’s health care system. Health care experts have speculated that the current language would allow states to funnel federal Obamacare money to non-health care needs, with little recourse from the HHS.

On the substance, the waivers let states abolish the ACA exchanges, the tax credits and its Essential Health Benefits, which mandate that insurers offer 10 broad coverage areas. Eliminating EHBs in turn could bring back annual and lifetime caps, both on individual and employer plans.

States would not be able to waive community ratings—which prevent insurers from charging more based on one’s health status—or guaranteed issue, which bans the denial of coverage based on pre-existing conditions. Republicans have thus argued they’re protecting those consumers. But other aspects of their waiver proposal would severely reduce coverage for sick people or cut off entirely their avenues to access it, with basically no oversight from the feds.

The heart of the bill isn’t dismantling the Affordable Care Act; it’s knee-capping Medicaid.

For all their talk about an “urgency” to fix the ACA’s individual market, Republicans have produced a bill that is more focused on their decades old goal of undermining Medicaid. Both in terms of the money cut from the health care system under the Senate plan and its coverage losses, the Senate bill’s cuts to Medicaid carries the weight of its ultimate consequences.

The first cut comes in the winding down of the Affordable Care Act’s Medicaid expansion. This move cuts at the heart of Obamacare considering the major role the expansion played in reducing the uninsured rate. Medicaid expansion also was key in boosting the individual markets, as can be seen by comparing marketplaces to those where states opted out of the Medicaid expansion.

But the Senate bill, like the House, goes one step farther, by overhauling the entire Medicaid program in a way that drastically shrinks that federal government’s commitment to it. The Senate bill would limit the amount of funding the feds give states for Medicaid each year, and would raise that cap more slowly than Medicaid’s costs have risen, meaning the cut grows over time.

So beyond whether the legislation repeals Obamacare, there’s also the question of whether it rolls back President Lyndon Johnson’s “Great Society” program by tearing a hole in the social safety net more gaping than we’ve seen in recent decades.