Congressional Republicans are being dragged back into a 2017 debate over Obamacare, reviving a bitter GOP divide that handed President Donald Trump an early black mark on healthcare.
Republicans are poised to let Obamacare’s enhanced subsidies lapse at the end of the year, viewing them as an overly generous benefit with insufficient guardrails against fraud and abuse. Less clear is how lawmakers plan to replace them, with GOP ideas ranging from a straight extension, as Democrats have been demanding, to more conservative proposals that would place the money into health savings accounts.
“You’re finding out we have differences of opinion,” Senate Majority Leader John Thune (R-SD) told the Washington Examiner with a laugh. “We got a lot of people who have strong views, but the one thing that unites us is we all believe that we need reform and we’ve got to do something to drive healthcare costs down.”
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He and Speaker Mike Johnson (R-LA) have razor-thin margins, and members are exhausted by the thought of trying to muscle a healthcare bill through Congress without Democratic support. A bipartisan route is challenging as abortion restrictions and Trump’s own demands complicate what appeared to be an early interest in a deal.
The impasse is nowhere near the political crisis that gripped the party back in 2017, when the late Sen. John McCain dashed GOP hopes of repealing Obamacare with a defiant thumbs-down on the Senate floor. And in a sign of how entrenched the law is today, even conservative Republicans want to make clear their aim is not a wholesale overhaul.
“I want to fix Obamacare. I tell people, ‘If you like your Obamacare, keep your Obamacare,’” said Sen. Rick Scott (R-FL), echoing President Barack Obama’s healthcare slogan from a decade ago.
Scott is drafting a GOP bill that would shift the subsidies, which are currently sent to insurance companies, directly into health savings accounts.
“What I want to do is say, why don’t we give people options?” Scott told the Washington Examiner.
Trump has repeatedly, and in increasingly forceful terms, attempted to steer Republicans toward that approach, posting on social media Tuesday that the “only” deal he’d support is one that ends payments to insurance companies.
Yet Democrats say the change is a nonstarter in bipartisan talks, arguing the push for HSAs would lead to the proliferation of “junk” plans that force consumers to foot a greater portion of their medical bills.
“I can tell you that’s not the bill that we’re going to put on the floor,” Sen. Tim Kaine (D-VA) said.
Trump’s demands are also a departure from multiple bills co-sponsored by centrist Republicans who generally feel the subsidies should be extended with just a handful of modifications. Earlier this month, Reps. Don Bacon (R-NE) and Jeff Hurd (R-CO) released a bipartisan framework that would add “reasonable income caps” and new guardrails to prevent subsidy fraud.
Centrists in the Senate have embraced a similar framework, hoping for a one-year extension with reforms phased in over subsequent years.
That centrist rift spells trouble for Republicans if they were to eliminate Democrats entirely and attempt healthcare legislation through reconciliation, a budget process that sidesteps the filibuster.
Not only did that plan backfire in Trump’s first term, with McCain and two other Republicans blocking even modest changes to Obamacare, but there are limitations on reconciliation that make crafting healthcare language difficult.
“I’m not ready for reconciliation,” said Sen. Lisa Murkowski (R-AK), who offered rare criticism of leadership earlier this year when Republicans used the process for their tax law. Murkowski favors the Obamacare subsidies and sided with McCain back in 2017.
On the other end of the spectrum, some conservatives want the White House to go further and end the enhanced subsidies altogether.
For those open to redirecting the payments to consumers, there is some debate over whether HSAs are the right vehicle. Sen. Bill Cassidy (R-LA), who chairs the Senate’s health panel, prefers more limited accounts that return the subsidy to the government if an enrollee does not use the funds.
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Cassidy and other congressional Republicans have been discussing with the administration what a conservative blueprint on healthcare might look like, and James Blair, Trump’s deputy chief of staff, said this week that one would be coming directly from the White House.
“We’re going to have the healthcare conversation. We’re going to put some legislation forward,” Blair said at a Tuesday policy breakfast hosted by Bloomberg Government.
Like in 2017, Republicans are coming late to the healthcare debate. They spent years attempting to repeal Obamacare, galvanizing their base behind a campaign message that helped propel them back to political power. Yet that unity fractured over a viable replacement, with McCain and other centrists expressing frustration at what became meager attempts at “skinny” repeal.
Democrats went on to make healthcare a signature campaign issue and won on that message, wresting the House away from Republicans in what amounted to a blue wave year.
This time around, Republicans appear eager not to repeat that fate. Instead of tackling healthcare first, as they did in 2017, congressional leaders prioritized passing Trump’s tax bill quickly, postponing the question of enhanced subsidies until later in the year.
They are also painfully cognizant of the political risks associated with letting the subsidies expire. Democrats have blamed the rising cost of healthcare on Republicans’ reluctance to extend it, and earlier this year claimed the GOP was ripping insurance away from millions by imposing new work requirements for Medicaid.
The GOP’s go-to argument so far is that it’s Democrats who spurred a healthcare affordability crisis, casting Obamacare as a doomed-from-the-beginning law that had stoked inflation with the subsidies.
Republicans only have a handful of weeks to present an alternative, however. In early December, Democrats will put forward a healthcare bill that Thune has guaranteed will get a vote. It’s expected to extend the subsidies in a way that could entice Republican support, with Democrats expressing openness to the income caps and other reforms.
“I think we’re going to stick with that plan, to have a proposal on the table in early December and have the vote second week of December,” said Kaine, one of seven Senate Democrats who voted to reopen the government this month in exchange for the healthcare vote. “That’s the goal, and I think we’ll get there.”
Republicans, meanwhile, expect their plan could come piecemeal. Sen. Lindsey Graham (R-SC), the chairman of the Budget Committee, told the Washington Examiner that he believes some, but not all, healthcare provisions could be passed through reconciliation, a party-line budget process.
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If a bipartisan deal on the subsidies does come together, Republicans insist it has to tighten abortion restrictions through the Hyde Amendment, which prohibits federal funds from being used on the procedure.
“I think the key to this is, can we get an HSA concept put together in a timely fashion, make sure the Hyde protections are in place, and then get rid of the fraud as a part of it?” said Sen. Mike Rounds (R-SD), who has previously argued for a one-year extension of the subsidies. “That might be a really good step as part of the first part of a package.”