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“Skinny repeal,” explained: Senate Republicans’ shrinking Obamacare repeal dreams

The latest plan to overhaul the health law.

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Dylan Scott covers health care for Vox. He has reported on health policy for more than 10 years, writing for Governing magazine, Talking Points Memo and STAT before joining Vox in 2017.

As Senate Republicans rush toward some final vote on a health care bill, they are faced with failing to keep a promise they’ve made for seven years. After failing to pass legislation to repeal and replace it or simply repeal it, they are turning to a new plan: repealing the individual mandate and delaying the employer mandate while leaving large swaths of Obamacare in place.

Few bills pronounced dead in the Republican crusade to overhaul the health care law have stayed that way. Still, the only viable path left standing amid the rubble, health care lobbyists and Senate aides believe, would be the much narrower “skinny repeal” bill.

Senate Republicans are rushing toward a vote on the skinny repeal plan with unprecedented speed — the day of the vote, they were still drafting the plan over lunch. If it were to pass, it would be a remarkable capitulation by Senate Republicans: an acknowledgement that even with a Senate majority and a Republican in the White House, they are capable only of repealing a few choice parts of the law they have vilified for seven years, while much of it appears likelier and likelier to remain in effect.

But for the millions of Americans whose health insurance has been at risk during the debate, the consequences from this slapdash bill could be severe. The Affordable Care Act’s Medicaid expansion that insured upwards of 15 million people and became a flashpoint in the Senate debate would remain in place. But even a skinny Obamacare repeal could destabilize the individual insurance market, putting health coverage for millions of Americans at risk.

This marks the apparent failure of years of Republican promises

Republicans promised for years to repeal and replace Obamacare. In January, once they controlled both houses of Congress and the White House, it became the top item on their agenda. But after a raucous debate, the House ended up with a bill that even Republican lawmakers admitted was imperfect and openly hoped the Senate would fix.

In the Senate, which has been privately debating and drafting their own plan to overhaul Obamacare for the past two months, divisions within the Republican Party have so far made it impossible to find a consensus. More moderate senators are wary of deep Medicaid cuts and the projected coverage losses: 22 million fewer Americans with insurance in 2026 under the Senate plan, versus Obamacare. Conservatives, meanwhile, wanted even more of the law to be rolled back. Nine Republicans voted on Tuesday night against the most recent version of the repeal-and-replace bill.

As they have struggled to find a plan that would win a majority, Senate leaders 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 that step, though — called a conference committee — leadership needs a bill that can get 50 votes. Eliminating the penalty for Obamacare’s individual mandate and, perhaps, the employer mandate and health care industry taxes might be the only plan that can win such broad support within the Republican conference.

A scaled-down repeal bill has been conceivable for some time: Sen. Rand Paul (R-KY) has argued in recent weeks that Republicans should start over and focus their repeal on provisions that every member of the conference can agree on. A former Senate staffer floated the possibility of repealing only the individual mandate to me a week ago.

But Senate leaders are turning to narrow repeal now only because their grander ambitions are falling short and they are anxious to pass any bill that they can sell as Obamacare repeal through the Senate. Conservatives would have to be satisfied that they are repealing some of Obamacare’s most hated provisions — particularly the individual mandate that they decry as an assault on personal freedom — but leaving much of the law touched.

Moderates might be willing to do the same, while also counting it as a win that Medicaid expansion and the entire Medicaid program are off the table for now.

Senate Republicans might have to leave big parts of Obamacare in place

If Republicans take this skinny repeal route, it would be a concession that major pieces of Obamacare could end up continuing, after years of promises to rip up the law root and branch.

Skinny repeal, as described by aides and lobbyists, would repeal the individual mandate, which penalizes people for not having insurance, and delay the employer mandate, which requires businesses to cover their workers or pay a fine.

That means it would likely leave these provisions in effect:

  • Tax subsidies millions of people use to buy private insurance
  • Medicaid expansion, which has covered millions of the poorest Americans
  • The law’s protections that ensure people with preexisting medical conditions can buy insurance, and that insurance plans cover essential health benefits, including preventive care and birth control
  • Its taxes on wealthy Americans

This could also mark the end of the Republican efforts to fundamentally overhaul Medicaid, which was never necessary to repealing Obamacare but which the party nonetheless tried to pursue as part of the repeal-and-replace plan. Senate Republicans would have instituted a federal spending cap on the program for the first time, ending its days as an open-ended entitlement.

The long-term effect, according to the Congressional Budget Office, would have been a 35 percent cut to the program’s spending, versus current law, over the next 20 years.

Skinny repeal could still destabilize Obamacare’s insurance market

Repealing the individual mandate while leaving the rest of the law in place 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. Republicans had even conceded as much, because their own bills sought to create some kind of replacement for the mandate.

Without such a mandate, healthy people could forgo coverage while sick people would continue to buy insurance. That would drive up costs for insurers, who in turn would increase premiums. As more and more people dropped out, leaving only the sickest people who need insurance most, the market could tailspin into a death spiral.

The Congressional Budget Office estimated that repealing the mandate by itself would lead to 15 million fewer Americans having health insurance 10 years from now.

That wouldn’t be the plan, of course. Senate leaders are selling their members on conference negotiations with the House being the best way to revive a more robust health care plan.

But that would hinge on successful talks with the House to craft an entirely new bill. Yet when the House sent over its preferred Obamacare repeal-and-replace legislation in May, a critical mass of Senate Republicans said it was unacceptable and they would never support it.

Lobbyists and former Republican staffers thought the irrefutable failure of the Senate’s own repeal-and-replace bill on Tuesday night suggested no similar plan could be revived in conference and hope to pass. Skinny repeal might be the only legislation that Republicans have any hope of getting out of Congress.

Otherwise, you would have to believe that Republican senators, after failing to find consensus among themselves, would go into negotiations with the House, with which they have even bigger policy differences, and somehow find a viable health care plan.

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