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Skinny repeal: the last-ditch idea to save the Senate health care bill

“Skinny repeal” is the latest ploy from GOP leaders.

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Sources suggest that Senate Republicans are weighing a last-ditch idea to pass some kind of health care bill in the coming days: a narrowly focused Obamacare repeal bill. A “skinny repeal” measure could eliminate the law’s hated individual mandate to buy insurance, perhaps some of its taxes on the health care industry, and little else.

That policy could prove extremely disruptive to the individual insurance markets, where people buy coverage if they don’t get it through their employers or the government, if it became law. Health insurance works as a business only if as many healthy people buy insurance as possible to offset the costs of paying for sick people’s health care. Getting rid of the Obamacare requirement that people buy health insurance or face a penalty could lead healthy people to avoid insurance altogether.

Politically, “skinny repeal” could be the end game, according to three health care lobbyists. It’s a plan with great peril — putting the individual insurance market at risk of spinning into a death spiral if Senate and House lawmakers can’t reach an agreement on a final piece of legislation.

As deep divisions persist within the Senate Republican conference, it may be the GOP’s last remaining chance to keep even a small chunk of its health care promises alive.

How the “skinny repeal” scenario could happen

If senators find 50 votes to start debate on health care on Tuesday, they are expected to take up both a clean bill to partially repeal Obamacare’s spending and all of its taxes as well as the repeal-and-replace legislation they’ve been working on for months.

Neither bill appears able to pass; both lack the support of 50 of the 52 Senate Republicans. Senate leaders have started promising reluctant senators that if they pass a bill, any bill, they will go into negotiations with the House and fix the legislation there.

In order to get to conference, though, leadership needs a bill that can get 50 votes. Eliminating the penalty for Obamacare’s individual mandate — possibly along with its employer mandate and some of its taxes on the health care industry — might be the only plan that can win such broad support within the Republican conference.

Three lobbyists told Vox that this was the path forward being charted by Senate leadership. One lobbyist said the bill could be narrowed to the “lowest common denominator product.”

That would fit with Senate leadership’s emphasis to its members on moving the health care bill to conference negotiations with the House at any cost.

“The whole emphasis is we're trying to get something to go to conference committee with,” a Senate Republican aide said on Tuesday. “I don't know if it's the main plan. But we have to get something done."

Skinny repeal has 3 huge policy problems

Repealing the mandates and taxes costs the federal government money — but under the “budget reconciliation” process Senate Republicans are using to bypass a Democratic filibuster, the Senate bill must save the government money. It is not clear whether Republicans could satisfy that procedural requirement while only repealing the mandate penalties and the taxes. The math would have to work out for this plan to function.

Repealing the individual mandate risks sending Obamacare’s insurance markets into a death spiral. 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.

The Republican strategy here would hinge on successful negotiations with the House to craft an entirely new health care plan. But when the House sent over its preferred Obamacare repeal-and-replace bill, a critical mass of Senate Republicans said it was unacceptable and they would never support it.

Yet now the plan appears to be that if Republican senators fail to find consensus among themselves, negotiations with the other chamber, with which they have even bigger differences, would somehow yield a viable health care plan.

The first domino to fall would be the vote to start debate on Tuesday. It is expected in a matter of hours.