Life Sciences Blog

What next for US healthcare reform as Senate fails to pass ACA repeal bill?




A slimmed down version of the Republican plan to repeal and replace Affordable Care Act (ACA; popularly known as Obamacare) failed to secure enough votes in the US Senate in the early hours of today (28 July). The bill - the Health Care Freedom Act (available here) - was rejected by 51 to 49 votes. All Democrats voted against it along with three Republicans – Senators John McCain of Arizona, Susan Collins of Maine, and Lisa Murkowski of Alaska.
 
The final vote did not take place until almost two hours past midnight, indicating just how contentious the debates were. Vice-President Mike Pence also made his way to the Capitol, expecting to cast the tiebreaking vote for the bill in the event of a 50:50 split in the vote. In the end, McCain's vote, which unexpectedly went against the bill, meant that the vice-president's intervention was not needed.
 
Key provisions of "skinny repeal" bill
The slimmed down version of the repeal bill, the Health Care Freedom Act (available here), is all in all eight pages. If implemented, it would have led to the following outcomes:
  • 15 million people losing health insurance by next year, according to estimates from the non-partisan Congressional Budget Office (CBO). 
  • The bill would have removed the individual mandate that requires people to have health insurance, without offering incentives to those who hold health insurance. In the absence of this key requirement under Obamacare, healthy people would have abandoned the health insurance exchanges, instead waiting until they get sick to obtain cover. The mandate for large employers to provide health insurance to their staff would have also been removed, further exacerbating the situation. As a result, sicker people would have been left in the health insurance pool, meaning that costs to health insurers would have rocketed and, consequently, premiums would have risen. 
  • The CBO estimates (CBO assessment available here) that premiums for people purchasing their own health insurance would have increased by 20% in all years between 2018 and 2026.
  • It would have been easier for states to waive federal requirements on the minimum benefits their insurance plans provide such as maternity care and access to prescription medicines. 
  • The bill would have removed federal funding for Planned Parenthood for one year, along with funding for several prevention and public health programmes available under Obamacare, while also delaying a tax on medical devices.
Even Republicans uncomfortable with the bill
The bill was unveiled just hours before the vote, and according to The New York Times, made several Republican Senators uncomfortable. McCain and Senators Lindsey Graham of South Carolina and Ron Johnson of Wisconsin "demanded ironclad assurances" from House Republican leaders that the House would not enact the Senate version of the bill. Although assurances were given, the newspaper suggested that some comments from House Republican Leader Paul Ryan left the door open to the possibility that if the Senate could not agree on a compromise House-Senate final bill, the House of Representatives might have no option but to pass the current Senate version of the bill. According to The New York Times, this possibility is what pushed McCain to eventually vote against the bill.
 
What next?
Where does this Senate vote leave the Republican healthcare reform initiative? Dead in the water is the likely answer, but given recent experience, anti-ACA initiatives have a way of making their way back to Congress. Republicans have spent the past seven years clamouring for Obamacare repeal and replace. It seems unlikely they will completely abandon their plans.
 
However, the Senate has clearly had enough at least for the time being. Unless the make-up of the Senate were to change considerably following the 2018 mid-term elections, with Republicans picking up more seats, it would be futile for them to try and push through another version of the healthcare reform considering they have a majority of only two seats in the Senate. And the version that failed to gain approval now was the 'barebones' version that all Republicans could agree to. 
 
It would also seem that some Republicans in the Senate have not liked the way the current version of the bill was imposed on them – on very short notice and with virtually no room for debate. They are likely to rebel against the highhanded approach of the Senate Republican leadership – which in turn would make it harder to secure their support for other Senate initiatives.
 
The House, where Republicans enjoy a more sizeable majority, is unable to proceed with healthcare reform on its own in the absence of a Senate-approved bill. So for now, healthcare reform may take a backseat, as the Senate turns its attention to the other matters. For now at least, no further healthcare reform discussions have been timetabled, suggesting the Senate is finally moving to other business without the distractions of healthcare reform debates. 
 
However, given that President Donald Trump would likely take this bill's defeat as a personal humiliation, the Senate Republican leadership should expect to come under considerable pressure to reintroduce another healthcare reform bill in the not too distant future. 
 
Milena Izmirlieva is the head of the Life Sciences research team at IHS Markit
Posted 28 July 2017

About The Author

Milena Izmirlieva is head of the Life Sciences research team at IHS Markit. Her areas of expertise include market access, pricing and reimbursement, HTA, generics and biosimilars, corporate strategies, and pharma promotion and advertising.