Herding Skinny Elephants – ACA Repeal Effort Fails in Senate

ACA Update 5.0

As you may recall, the House Republican leadership struggled corralling its members into moving forward with the Affordable Care Act (ACA) repeal legislation earlier this year. The Senate GOP leaders found it difficult as well in herding elephants to rally around an ACA repeal bill. As we last left off, the Senate Leadership had unveiled its ACA repeal and replace plan, but it lacked enough support for a vote before the July 4th recess. The vote was delayed as the Senate Leadership re-crafted its proposal during the July 4th recess. Since then, a lot has happened, but at the same time, nothing has happened. Here is the skinny on what has taken place:

  • The re-crafted ACA repeal and replace Senate bill failed to garner enough Republican support. Senate Majority Leader Mitch McConnell then mentioned he would push for a repeal-only bill for Senators to consider (and no replacement provision), but this too failed to win over enough Senate Republicans. Remember, the Republicans could only afford to lose two votes in the Senate as no Democratic support was expected.
  • Thus, the ACA repeal bill looked as if it was finished, and the finger-pointing ensued. President Trump then summoned Republican Senators to the White House for lunch recently to push for an ACA bill. He indicated that the Senate should stay in session through the August recess until they passed an ACA bill.
  • It is uncertain what developed, but apparently some progress was made following the White House visit and McConnell thought he would move ahead. In the middle of this, Senator John McCain had eye surgery and soon after, it was announced that he has been diagnosed with brain cancer. McCain took time from his recuperation this week to come back to the Senate to cast a key vote to allow the ACA debate to move forward. The 50-50 tie was broken by Vice President Pence.
  • The political drama moved forward as Majority Leader McConnell brought up several bills. He first brought up an ACA repeal and replace bill which was similar, but not identical, to the ACA legislation which passed the House in May. This bill failed, so next McConnell brought up a straight ACA repeal bill, but this too failed. Finally, McConnell and his colleagues submitted a “skinny” ACA repeal. This skinny version was a scaled-back version of the ACA repeal and included a repeal of the individual mandate and the employer mandate, as well as the medical excise tax. In fact, the skinny bill was only eight pages in length.
  • McConnell’s goal was to get the skinny version of the ACA legislation to pass through the Senate, and then move to a House-Senate conference. In this conference, anything could happen. The members of the conference can take pieces of the bill from the House version; from the Senate version; or something new. Once legislation is agreed upon in the conference, the same bill must then pass both the House and the Senate.
  • But in the early hours of July 28, 2017, in another drawn out and dramatic proceeding, the Senate defeated the skinny ACA repeal legislation by a 51-49 vote, with Republican Senators Collins, Murkowski, and McCain voting against the skinny repeal. This was a stunning defeat for McConnell and the Republicans.

What’s next? With this latest defeat, the Republicans will need to re-group and determine how to proceed. They spent a lot of time and political capital in trying to repeal and replace the ACA, and it is unsure if they will attempt to repeal it again; try to work with Democrats on fixing certain aspects of the ACA; or do nothing for now.

The President and Republican leadership wanted to get an ACA bill completed so that they had some momentum moving on with their next legislative package – tax reform. Instead, they are licking their wounds as they launch into tax reform, and this legislation will prove equally as difficult to pass through Congress as the ACA repeal has been.

By |2017-10-24T11:00:45+00:00July 28th, 2017|Uncategorized|0 Comments

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This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.

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