Senate Begins Floor Debate on Healthcare; New "Skinny" Obamacare Repeal Plan Seen as Leading Contender for Passage

(Parker Tax Publishing July 2017)

On Tuesday afternoon, the Senate approved 51 to 50 a "motion to proceed" on Obamacare repeal legislation, clearing the way for floor debate and voting on several competing healthcare bills. A few hours later the Senate rejected the Better Care Reconciliation Act (BCRA), the repeal-and-replace plan Republicans had been developing for months. The Senate is now expected to move on to voting on a range of alternatives, including a "clean" Obamacare repeal along the lines of the one it passed in 2015, and a new "skinny" repeal plan set to make its debut later this week.

Technically, the vote on the BCRA wasn't to approve or disapprove the bill, but rather a procedural measure to determine if it complied with budget rules. But the effect is the same, and, in the end, the vote wasn't close. Nine Republicans joined 48 Democrats to reject the bill 57 to 43. The vote was on the revised version of the BCRA that included numerous changes from the bill initially released in June, including retention of the net investment income tax. The defeated version also included the Cruz amendment, which would allow insurance companies to sell stripped down health plans side-by-side with full-coverage plans complying with Obamacare's essential benefits regulations.

With the BCRA defeated, the Senate is expected to move on to considering several competing Obamacare repeal bills and amendments. The rest of the week is expected to include the following:

(1) A vote on a clean, partial Obamacare repeal along the lines of legislation passed by the Senate in December 2015. The latest iteration of clean repeal, the Obamacare Repeal and Reconciliation Act (ORRA) was released last week. According to the Congressional Budget Office (CBO), 32 million fewer people would have health insurance in 2026 under ORRA, compared with current law. ORRA is not expected to have enough votes to pass.

(2) Possible votes on Cassidy-Collins, Graham-Cassidy, and several other repeal-and-replace plans.

(3) Introduction of a new "skinny" Obamacare repeal plan. Although the details of such a plan have not yet been disclosed, it would likely include repeal of the individual and employer mandates and not much else. Past CBO scoring of similar proposals has indicated that, compared with current law, 15 million fewer people would have health insurance in 2026 if the mandates are repealed without offsetting changes. Nonetheless, skinny repeal appears to be gaining momentum as the option that will allow the Senate to pass something on healthcare and get to conference with the House, while keeping political fallout to a minimum.

(4) A so-called vote-a-rama, during which dozens (perhaps hundreds) of amendments will be proposed, considered for a few minutes, and voted on. Most of these will be messaging amendments designed to score political points and/or force uncomfortable votes. Few, if any, will make it into the final legislation.

Senate leadership has indicated that it expects to wrap up debate and hold a final vote on healthcare this Friday.

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

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