Rand Paul

The GOP's New Obamacare Repeal Bill Shouldn't Pass. It Might Anyway.

A looming Senate deadline might push holdout Republican senators over the line.

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Credit – Bill Clark/CQ Roll Call/Newscom

After nine months of political failure, Senate Republicans, you may have heard, are closer than ever to passing a bill that would repeal, or at least rewrite, Obamacare. Legislation introduced last week by Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-LA) that would repeal Obamacare's individual mandate and convert the health law into a system of state-administered block grants appears to be gaining momentum, with some reports suggesting that it may be just a few votes short.

This is true, but then, Senate Republicans have been just a few votes shy of a majority to repeal Obamacare all year long. A number of high-profile holdouts remain, and passing the bill would require a handful of GOP lawmakers to break their word.

In some sense, little has changed. On the merits, and on the politics, this bill shouldn't pass. And yet it still could.

There is one important factor that is different: Thanks to Senate rules, Republicans know they have a strict deadline. After September 30, the procedural vehicle that allows Senate Republicans to pass a health care bill with a simple majority vote expires. This means they have less than two weeks to make good on their promise to repeal and replace the health care law. In other words, it's their last chance. They might take it.

The list of holdouts will, at this point, be mostly familiar to anyone who has followed the saga of Obamacare repeal this year. Sens. Collins (Maine) and Murkowski (Alaska) have always had concerns about the way the bills treat Medicaid and Planned Parenthood funding. The new legislation, which would convert Medicaid into a block grant over time and defund Planned Parenthood, wouldn't address those concerns.

Sen. John McCain (R-Ariz.) who cast a deciding vote against the last repeal bill, in July, citing the rushed and secretive way in which it was handled, still has process concerns: He wants regular order, with the opportunity for debate and amendments, which would not seem to be possible given the compressed timeline required under Senate rules. The Congressional Budget Office has already indicated it will not have a complete score ready until sometime next month. McCain remains undecided.

Other objections are somewhat more novel. Sen. John Kennedy, (R-La.), for example, said yesterday that he worries that in its current form the bill would let liberal states erect government-run single payer systems. Somehow we have arrived at the point in this debate in which a Republican legislator is worried that passing a bill dubbed Obamacare repeal would actually pave the way for fully government run systems.

His concern is not entirely unfounded, however. The legislation would give states far more flexibility to regulate and manage how Obamacare dollars are spent, meaning that liberal states could plausibly put the block grant money they received toward funding single payer, although it probably wouldn't be enough on its own to make the budget math work.

States that hoped to innovate in a more market oriented direction, meanwhile, would have more flexibility than under current law, but would face more restrictions than their liberal counterparts. The bill would allow all states to experiment, but it is tilted towards experiments in increased government intervention.

The block grant design, meanwhile, has led to criticisms that the bill would not really repeal Obamacare, but would merely kick its administration down to the states while retaining most of its spending. This is the chief objection raised by Sen. Rand Paul (R-Ky.), who has consistently opposed Republican health care legislation this year and has emerged as the chief Republican opponent of the new plan.

In a series of tweets and an op-ed for Fox News, Paul has argued that Graham-Cassidy cannot be legitimately described as Obamacare repeal, because it keeps most of its funding in place, and would retain its requirement that insurers cover all applicants regardless of preexisting conditions.

The bill's block grant formula, Paul says, would redistribute federal money from blue states to red states, because it spreads out the money that is now used to fund Obamacare's Medicaid expansion—which only 31 states participate in—to every state. Essentially, it would take money away from states that expanded Medicaid under Obamacare and give more to states that didn't.

Is it relevant that Paul's home state of Kentucky was one of the states to expand Medicaid? Perhaps. But Paul's description of the underlying political dynamic isn't too far off.

"It just looks like the Republicans are taking the money from the Democrat states and giving it to the Republican states," Paul said Monday. And his worries about the arcane future policy battles the system would set up are worth considering: "So we're going to go through year after year of Republicans fighting Democrats over the formula?" It's hardly clear that Graham-Cassidy would result in a stable policy or political equilibrium.

The bill, then, doesn't really solve any of the problems that have kept previous iterations of Obamacare repeal from passing. Yet Senate Republicans, looking through the prism of months of frustration and failure, might pass it anyway for one reason: This is their final shot, and they promised they would.

It's true that few if any Republicans imagined that repeal and replace would look like this. But few if any Republicans ever imagined what, precisely, repeal and replace would look like at all. With the Senate deadline looming, Republican legislators may see this as imperfect but better than the alternative, which is to do nothing, or to find ways to address the instability of Obamacare's exchanges by propping them up.

It doesn't hurt that in addition to allowing Republicans to say they voted to repeal and replace Obamacare, it would also shift responsibility—and blame—to the states. Although federal formula and funding cliff fights would still loom in the distance, Republicans might convince themselves that in voting for Graham-Cassidy, they would be voting to not have to deal with Obamacare ever again. And after this year's bruising, embarrassing legislative efforts, that might be enough.