Republicans face a monumental choice on Obamacare repeal: go big or go skinny

Senate Republicans haven’t actually passed a health care bill yet, but their end game looks increasingly clear: a scaled-down bill that would repeal only the most unpopular parts of Obamacare, like its individual mandate.

If that passes, then what? The House and Senate, already six months into a painful debate that has stalled the rest of their agenda, would face a stark choice.

They could either:

“Skinny repeal” would be a remarkable capitulation for Republicans: Huge swaths of Obamacare — its tax subsidies, Medicaid expansion, and insurance regulations — would remain in place, though repealing the individual mandate would risk destabilizing the individual insurance market.

That might explain why, for the time being, Republican leaders are saying openly that they would try to revive their broader repeal-and-replace plan during the negotiations with the House. Skinny repeal is, in this scenario, only a vehicle for the Senate to pass something and start those talks.

“To me, that seems to have a lot of benefits. Getting us to conference, where the House has passed a comprehensive bill,” Sen. John Cornyn, the No. 2 Republican, told reporters Wednesday. “We could use the template that the House has, that addresses all of these issues, and come up with the best of the ideas that we’ve developed.”

But the feeling among GOP congressional aides and health care lobbyists is, at least for now, that “skinny repeal” might be the most viable path for Congress to get something to Trump’s desk.

The dramatic failure of the Senate’s own repeal-and-replace plan Tuesday night, with nine Republicans opposing it on a procedural vote, suggests Republican senators are a long way from having the support they need for such a comprehensive bill.

“I’m starting to think some sort of skinny repeal could be the end game, not just the Senate end game,” one health care lobbyist and former Senate staffer told me Tuesday night.

The past week has proven how unpredictable this debate can be. Senate Republicans have gone from looking irreparably short on votes, to unexpectedly getting the support to start debate, to floating a brand-new health care bill that hasn’t even been released publicly just days before it might get a vote.

One GOP aide, allowing that skinny repeal was “a plausible scenario,” also added: “As with this whole process, there are so many variables and who the fuck knows what’s actually going to happen.”

In order for skinny repeal to pass Congress, conservatives — particularly the rambunctious House Freedom Caucus, which has the votes to block a plan they don’t like — must accept a significantly scaled-back victory.

Some of those archconservatives are already agitating against the idea, pushing instead for the Senate to pass anything — even if it’s skinny repeal — but then enter into negotiations with the House for more robust plan.

“The skinny version in itself, if it comes before vote in the House, would not pass,” Rep. Mark Meadows, leader of the Freedom Caucus, said Wednesday. “It becomes a vehicle.”

That could be posturing. The most conservative senator, Rand Paul of Kentucky, has spoken positively about the skinny-repeal concept. Meadows and his crew might feel compelled to pass something, rather than nothing, if it’s their only option.

But for now, Republican leaders are promising to enter negotiations — and the outcome there could be a bill that resembles the House and Senate’s repeal-and-replace bills. That is the desired outcome, as Republican senators openly admit.

“If we can get a skinny bill over (to the House), we can work in the conference committee to actually improve on the product,” Sen. Mike Rounds (R-SD) told reporters Wednesday, though he allowed that House-Senate talks might not be any easier than the Senate’s internal deliberations.

Those bills both scaled down financial assistance for private coverage, rolled back Obamacare’s insurance regulations, ended its Medicaid expansion, and instituted a federal spending cap on the entire Medicaid program.

The end result would be upward of 20 million fewer Americans having health insurance, 10 years from now, compared to Obamacare — and hundreds of billions of dollars in Medicaid spending cuts, versus current law.

In that scenario, wavering Republican senators would be put on the spot, forced to vote for a plan that for months they said they could not or risk being the Republicans who saved Obamacare.

“Whatever comes out (if anything comes out) of conference would look more like the House bill than a skinny repeal bill and McConnell would tell his members that it’s this or nothing,” the House aide said.

That is the fear for Democrats and progressives, which is why they have labeled the Senate’s skinny repeal idea “a Trojan horse” that would eventually lead to a more overarching repeal bill after the House-Senate conference.

They are leaning on this possibility to spook the most hesitant Republican senators from supporting skinny repeal — who seem eager to move on from health care amid blistering attacks from Democrats and relentless pressure from conservatives.

“Let’s put this behind us,” Sen. Dean Heller (R-NV), who faces the toughest reelection race in 2018, told reporters.

That doesn’t sound like a man eager for another month of health care negotiations between the House and Senate. That apprehension could end up being enough to kill skinny repeal in its crib, if Senate moderates refused to back it for fear of conference negotiations sending something like the House bill back to them.

Or that could be the reason that Republican leaders swallow their pride and pursue “skinny” Obamacare repeal as the only way for them to pass a health care bill.

The idea of “skinny” repeal — eliminating only the law’s individual and employer mandates, as well as its tax on medical device companies — has surfaced only because Senate Republicans look painfully short on votes for repeal-only or repeal-and-replace legislation.

The path doesn’t get any easier. A revised version of the Senate repeal-and-replace plan, with concessions to both conservatives and moderates, still failed handily on a procedural vote with nine Republicans opposing it. The Senate’s parliamentarian has also blown significant holes in the legislation, deeming several important provisions to be in violation of the Senate’s budget rules.

“Two things critical yesterday: the [repeal-and-replace] vote and the parliamentarian,” another Republican lobbyist told me. “It’s so much harder to see [repeal-and-replace] happening now.”

The final conclusion for Republicans might be that the only consensus, even within their own party, is to repeal just Obamacare’s unpopular pieces: its mandates and taxes. The popular provisions — federal spending on insurance coverage and the protections for people with preexisting conditions — are simply too entrenched.

That reality, and the overwhelming desire among Republicans to move on from health care, could win out.

“I still think we will just pass (or try to) whatever the Senate can possibly squeeze out as-is,” a second House Republican aide told me. “Everyone, especially Trump, just wants this over. A conference and then two more votes ain’t that.”

Repealing the individual mandate alone carries huge policy risks. Health insurers have long said that a compulsion for people to buy insurance is necessary in order for the law to work, after it required that insurers cover everyone and charge everyone the same premiums no matter their health.

Without such a mandate, healthy people could forgo coverage while sick people would continue to buy insurance, driving up costs for insurers, who in turn increase premiums, sending the market into a death spiral. The Congressional Budget Office estimated repealing the mandate by itself would lead to 15 million fewer Americans having health insurance 10 years from now.

But the mandate remains deeply unpopular with the American public, and repealing it would allow Republicans to undo a policy they view as an existential infringement on personal freedom.

It would also notch a win of some kind on Obamacare repeal that they can try to sell to the conservative base, while allowing Congress to move on to other issues.

“There’s a plausible scenario where House leadership takes the skinny repeal and puts it directly on the House floor to ensure that we get a win on health care this year,” the first House aide told me, “even if it’s an incremental step, and then moves on.”