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FEDERAL | ACA Repeals Die in Congress, While Trump Takes Action into His Own Hands

In the Senate's last ditch effort to repeal the Affordable Care Act, GOP leadership once again failed to secure the necessary votes to move a bill forward. Sen. Susan Collins (R-Maine) provided the decisive third 'no' vote from the Republican caucus, following earlier announcements from Sens. Rand Paul (R-Ky.) and John McCain (R-Ariz.). Even under the fast-track budget process known as reconciliation, Republicans could not afford to lose more than two votes and still pass the bill with Vice President Pence serving as the 51st vote.

Sen. Collins waited to announce her position in hopes of reviewing a score from the Congressional Budget Office (CBO) before making a final decision. The agency's preliminary score found that the plan would reduce the number of people with health insurance by millions, while cutting the budget deficit by at least $133 billion over the next decade. The CBO considered an earlier version of the legislation, which did not take into account revisions made by bill sponsors that targeted both conservative and centrist holdouts on the earlier proposal. While leadership ultimately chose not to bring the bill to the floor, Republicans disagreed on whether a vote should be held. Some Senators urged leadership for the vote so that they could be go on the record, even if the bill were to fail. Others, leery of the 2018 midterm elections, did not want to waste political capital on a failed vote.

While Republicans' ability to use reconciliation on health care reform expired, President Trump and congressional Republicans have pledged to continue working on their promise to repeal and replace Obamacare. The GOP has decided to focus their fiscal year (FY) 2018 budget resolution on tax reform, but a repeal effort could resume in FY19. Sen. Graham (R-S.C.) and others have stated that, in order to win the support of those lawmakers upset by the timeline constraints and process used this year, Republicans will prioritize moving proposals through regular order going forward.

Meanwhile, President Trump issued an executive order that will loosen rules and restrictions around the availability of association health plans (AHPs) and low-cost, short-term plans currently curtailed under Obamacare. The order also directs federal agencies to increase tax-free "Health Reimbursement Arrangements (HRA)" – employer-funded accounts to help employees pay for costs associated with their health care. Agencies will now be required to begin the rulemaking process to implement the executive order.

In a separate announcement, the Administration stated plans to immediately discontinue cost-sharing reduction (CSR) payments to insurance companies. The U.S. Department of Health and Human Services (HHS) concluded that it could not lawfully continue the payments without an appropriation of funds from Congress. The President claims these moves will foster competition among insurers, encourage more people to sign up for coverage, and end the undue profiting and bailout of insurance companies from CSR payments. Opponents of the decisions are concerned that this will undermine the risk pool for plans offered on the exchange, as healthier people will be encouraged to purchase cheaper, skimpier plans, thus driving up costs among plans that offer more comprehensive coverage. A coalition of 18 patient organizations, including the March of Dimes and the American Lung Association, cautioned that the order would put sicker Americans at risk of being priced out of the market.

States quickly announced plans to sue the President over his decision to end the health insurance subsidies. The lawsuit, which includes 18 states and the District of Columbia, is led by the attorneys general in California and New York. Collectively, the attorneys general are requesting a court order compelling the Administration to continue making the CSR payments, arguing that the payments are mandated under current law.

Senate Health, Education, Labor, and Pensions (HELP) Committee Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Murray (D-Wash.) have been negotiating a bipartisan package to stabilize Obamacare's individual health insurance markets and now face increased pressure to reach an agreement in light of the White House's recent decisions. Their effort would likely fund the insurer subsidy payments while increasing flexibility for states to regulate their own insurance markets. It was reported that the plan has received support from the President should Democrats remain supportive of increased state flexibility. However, Director of the Office of Management and Budget (OMB) Mick Mulvaney stated that the President will oppose any congressional attempts to restore CSR funding unless he receives something in return – like repeal of the Affordable Care Act (ACA) or money for a border wall. Should the bipartisan stabilization package not succeed, congressional Democrats have threatened to use must-pass legislation to restore the CSR payments, such as the year-end omnibus spending bill which must pass by December 8 to keep the federal government running.

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