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July 27, 2017

The Senate could pass 'skinny repeal.' Here's what you need to know

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Editor's note: This is a developing story

GOP leaders are "cautiously optimistic" that the Senate can pass what they are calling a "skinny repeal" bill that would repeal the Affordable Care Act's individual mandate and employer mandate, with a few other smaller changes to the law, the Washington Post reports.

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Senate Republicans are attempting to unite their caucus around such a plan after the failure this week of procedural votes on two broader health reform measures.

What might be in the 'skinny' bill?

Axios' Caitlin Owens reported Thursday at about 11 a.m. ET that the details of "skinny repeal" have yet to be finalized, but that the current draft would:

  • Repeal the ACA's individual mandate;
  • Partially repeal the law's employer mandate;
  • Eliminate funding for Planned Parenthood for one year;
  • Add more funding for community health centers; and
  • Modify a provision that allows states to waive certain ACA requirements.

Peter Sullivan reports for The Hill that the current draft would also cut the ACA's Prevention and Public Health Fund, which helps CDC supplement public health funding and respond to emergencies.

Several GOP senators considered to be swing votes, including Rob Portman (Ohio), Shelley Moore Capito (W. Va.), and Susan Collins (Maine), have said they have not seen enough details on "skinny repeal" to say how they would vote. Meanwhile, GOP Sens. Rand Paul (Ky.) and Dean Heller (Nev.), who had voiced concerns about previous GOP health reform bills, have said they likely would back "skinny repeal."

What obstacles could 'skinny repeal' face?

Sam Baker reports for Axios that is not yet clear whether the provisions modifying ACA waivers or defunding Planned Parenthood would be allowed under the Senate's reconciliation rules, which are governing the health reform debate.

In addition, it is not clear if "skinny repeal" would generate sufficient savings for it to comply with budget reconciliation rules and therefore require 51 votes to pass, rather than 60. Under the budget reconciliation process the Senate is using for health reform, its bill would need to generate on-budget savings of at least $133 billion over 10 years.

The parliamentarian will advise the Senate on whether that condition has been met, but compliance technically is decided based on estimates from the Senate Budget Committee chair. Last month, Joe Williams reported for Roll Call that GOP leaders were considering asking Senate Budget Committee Chair Mike Enzi (R-Wyo.) to go against the parliamentarian's advice if she did not rule in their favor. 

What's the next step if the Senate passes 'skinny repeal?'

Senate GOP leaders have said that if the chamber passes "skinny repeal," it could then enter into negotiations with the House as part of a conference committee. But it's unclear whether any conference committee would ultimately advance broader reforms.

Conference committees are typically used to iron out differences between similar bills. However, in this case, a conference could "function more like another opportunity to write another bill," David Nather and Sam Baker report for Axios, given how different the Senate legislation would be from the House-passed AHCA.

An alternative possibility, according to Senate Majority Whip John Cornyn (R-Texas), is that the House might pass the Senate bill as-is, meaning that "skinny repeal" could become the law of the land if it is signed by President Trump.

Some House Republicans have pushed back against that idea. House Freedom Caucus Chair Mark Meadows (R-N.C.) said Wednesday, "The skinny version in itself, if it comes before vote in the House, would not pass."

What effects could 'skinny repeal' have on premiums and coverage?

Because no official "skinny repeal" bill has been released, the Congressional Budget Office (CBO) has not yet formally analyzed the proposal. However, on Wednesday the agency released an estimate requested by Senate Democrats of the effects of a "skinny"-like proposal that would repeal the ACA's coverage mandates and medical device tax.

The agency projected that under such a bill, compared with current law 15 million more Americans would be uninsured between 2018 and 2020, and 16 million more Americans would be uninsured between 2021 and 2026.

Specifically, CBO estimated that in 2026, 7 million fewer Americans would have Medicaid coverage, 5 million fewer Americans would have individual market coverage, and 4 million fewer Americans would have employer-sponsored coverage.

CBO has also previously estimated that repealing the individual mandate alone would increase individual market premiums by about 20 percent relative to current law. That's because the ACA's individual mandate is designed to encourage young and currently healthy people to sign up for coverage. Without such a penalty provision, people who are old and sick would make up a greater share of exchanges enrollees, leading insurers to raise premiums—a phenomenon known as adverse selection.

Larry Levitt, senior vice president at the Kaiser Family Foundation, told the Wall Street Journal that if skinny repeal "leaves in place the premium tax credits, I think it would result in big premium increases but not a complete decimation of the individual market." He added that "a big question is how insurers would react. I think more would exit the market, but some would stick around."

Levitt later said that a version of "skinny repeal" that would allow states to waive certain ACA requirements "would mitigate premium hikes to some extent by allowing ... skinnier benefits through state waivers."

Insurers voice opposition

America's Health Insurance Plans (AHIP) on Thursday stated its opposition to the concept of "skinny repeal." Specifically, AHIP said it "would oppose an approach that eliminates the individual coverage requirement, does not offer alternative continuous coverage solutions, and does not include measures to immediately stabilize the individual market."

The Blue Cross Blue Shield Association said in a statement on Wednesday, "If there is no longer a requirement for everyone to purchase coverage, it is critical that any legislation include strong incentives for people to obtain health insurance and keep it year-round. A system that allows people to purchase coverage only when they need it drives up costs for everyone."

Meanwhile, one insurance executive—CareFirst Blue Cross and Blue Shield President and CEO Chet Burrell—on Wednesday said that a "skinny repeal" bill "would lead to a death spiral in the individual market." Burrell added, "It is hard to think of anything more devastating, especially if nothing else is done to stabilize the health insurance market. The significant coverage gains we have made for Americans in recent years would be wiped away with this damaging blow."

(Eilperin et al., Washington Post, "PowerPost," 7/27; Nather/Baker, Axios, 7/27; Nather/Baker, Axios, 7/26; Joe Williams, Roll Call, 7/26; Scott [1], Vox, 7/26; Scott [2], Vox, 7/26; Sanger-Katz, "The Upshot," New York Times, 7/25; Demko, Politico, 7/26; Werner, Associated Press, 7/27; Fuller, Huffington Post, 7/26; Everett et al., Politico, 7/26; Lee/Livingston, Modern Healthcare, 7/26; Armour et al., Wall Street Journal, 7/26; CBO report, 12/8/16; CBO report, 7/26; Williams, Roll Call, 6/21; Baker tweet, Axios, 7/27; Owens, Axios, 7/27; Levitt tweet, 7/27; AHIP letter, 7/27; Sullivan, The Hill, 7/27; Caldwell tweet, 7/27).

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