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Proposal to loosen Obamacare regulation won’t fly under Senate budget rules

It’s another blow to the GOP’s repeal hopes.

US Capitol Bill Clark / Getty Images
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.

Waivers that would allow states to roll back Obamacare’s insurance regulations violate the Senate’s rules for budget reconciliation and will need 60 votes to pass, Democrats said midday Thursday, another blow to the Republican hopes of undoing the Affordable Care Act.

No final legislation has been released, and the Senate parliamentarian was reviewing an earlier version of the Senate repeal-and-replace bill that has already failed to advance on the Senate floor. But Senate Republicans are scrambling to pull together any health care bill that can win 50 votes — and the parliamentarian’s decision could make it impossible for Republicans to add a provision that would let states waive Obamacare’s rules to their final bill.

Axios reported earlier Thursday that Senate Republicans wanted to include the state waivers in the so-called “skinny” Obamacare repeal bill that they are expected to roll out in the next 24 hours. That appears to be the only plan with a chance of getting support from 50 Republican senators.

But according to Senate Democrats, that would now be impossible without a rewrite of the provision that was included in the earlier Senate bill.

If the provision were kept in the bill, Democrats could move to strike it and it would require 60 votes to override, which would require Democratic support that will never come. The only other option would be for Republicans to ignore the parliamentarian, an unprecedented step in recent Senate history.

The state waivers would have built on an existing Obamacare program that allows states to pursue their own health care plans. It would have given states the ability to waive some core Obamacare insurance regulations, particularly the requirement that health insurers cover certain essential health benefits.

But outside experts have long thought changes to insurance regulations violate the Senate budget rules, which are supposed to limit policies considered under budget reconciliation to those that directly affect federal spending or revenue. It appears the Senate parliamentarian, Elizabeth MacDonough, agrees.

Even if Senate Republicans pass a bare-bones bill and try to revive a bigger health care bill in negotiations with the House, the parliamentarian’s finding could make it harder to resuscitate any kind of regulation rollback in those talks.

Conservatives have aggressively pushed to unwind Obamacare’s insurance regulations, but the Senate rules have proven difficult to work around. They remain a big problem for those conservative hopes, after Thursday’s news.

Without the state waivers, the skinny repeal bill appears to be limited to eliminating Obamacare’s individual mandate and its employer mandate and possibly defunding Planned Parenthood. Previous iterations of the latter provision have also been suspect under the Senate budget rules.