Senate Republicans abandon latest effort to unwind Obamacare

WASHINGTON – Senate Republican leaders on Tuesday abandoned their latest campaign to dismantle the Affordable Care Act, conceding their plan lacked key support. But they showed little interest in moving swiftly to shore up the seven-year-old law with the crucial funding it needs.

The official collapse of the Cassidy-Graham health-care bill once again leaves the party short of fulfilling a signature promise, which some Republicans worried could inspire a backlash among their base heading into the 2018 midterm elections

And the failure of that alternative to the ACA, combined with the GOP's reluctance to fix weaknesses in the existing law, leaves states, insurers and millions of consumers who rely on its coverage with substantial uncertainty. Enrollment for 2018 health plans begins in barely a month.

The Senate leaders said they would turn their attention to their next major legislative undertaking. "Where we go from here is tax reform," Majority Leader Mitch McConnell, R-Ky., told reporters after holding a closed-door policy lunch with members of his caucus.

Republicans already are bracing for the political fallout from the measure authored by Sens. Lindsey Graham, S.C., and Bill Cassidy, La., which McConnell had hoped to bring to a vote this week. They said the pressure to pass a tax reform bill was higher than ever and hoped the Republican base would give them a bit more time to take another shot at repealing the ACA.

"They're going to be frustrated, and I don't blame them," said Sen. John Thune of South Dakota. "I hope they'll have a little bit of patience."

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Some GOP senators have already drawn primary challengers who are running as more conservative alternatives. Tuesday's developments compounded existing concerns about the threat the far right could present next year.

The most pressing unresolved aspect of the 2010 health-care law is the future of subsidies known as cost-sharing reductions, which provide discounts to roughly 7 million lower-income customers for health plans' deductibles and other out-of-pocket costs. The payments are expected to cost the federal government $10 billion next year.

President Donald Trump has repeatedly threatened to stop the payments to insurers to offset those discounts, and both the Cassidy-Graham bill and recent bipartisan Senate negotiations would have guaranteed those payments for another year or two.

Wednesday is the deadline for insurers to sign government contracts so they can sell health plans on the ACA marketplaces for 2018. Many companies are hiking premium rates by double digits, but they have suggested they would curb such increases if the Trump administration agreed to provide the cost-sharing subsidies for all of next year.

Raising rates is "a best-worst solution absent a federal decision," said Peter Lee, executive director of Covered California, the state-run marketplace there.

Some GOP lawmakers expect consumers could experience major problems in the months ahead – and predict those would backfire on Democrats and build momentum for the law's eventual repeal.

"I personally think it's time for the American people to see what the Democrats have done to them on health care," said Senate Finance Committee Chairman Orrin Hatch, R-Utah. "They're going to find they can't pay for it, they're going to find that it doesn't work . . . Now that will make it tough on everybody. Maybe that's what it take to wise people up."

"Health-care problems are going to continue because Obamacare is broken," said the Senate's second-ranking Republican, John Cornyn of Texas, who opposes providing the subsidies without making major changes to the ACA favored by conservatives.

Earlier this month, Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tenn., and his Democratic counterpart, Sen. Patty Murray, Wash., had been working on an agreement that would guarantee the subsidies for at least a year. The deal would have provided states with more flexibility in how they carry out the law's insurance rules.

Alexander said in a statement Tuesday that he would consult with Murray and other colleagues "to see if senators can find consensus on a limited bipartisan plan that could be enacted into law to help lower premiums and make insurance available" in the individual market for 2018 and 2019.

But it is unclear how much appetite there is for a stabilization bill among Republicans in the Senate, let alone in the House. Aides to House leaders said they do not see a bill providing billions in ACA subsidies as viable in the lower chamber – a point House Speaker Paul Ryan, R-Wis., conveyed to GOP senators.

Trump has suggested on several occasions that, in the absence of a replacement bill, Republicans should let the current system fail to force Democrats to negotiate.

The administration is only covering the cost-sharing payments on a month-to-month basis right now; a White House official confirmed Tuesday that it had made them for September but said officials had not decided what to do going forward.

A decision to end the subsidies would make the marketplaces particularly precarious because insurers could legally withdraw their participation, regardless of the calendar.

Julie Mix McPeak, Tennessee's insurance commissioner and the incoming president of the National Association of Insurance Commissioners, said that both health plans and her colleagues around the country had been "expecting some movement from Congress" on the subsidies by the end of September.

"Nothing having moved forward makes me very nervous," McPeak said. Until Wednesday's contract deadline passes for insurers planning to sell marketplace policies in 2018, "I feel like I don't have a strong confidence we know what our markets look like . . . I'm afraid we are still looking at any environment where insurers are trying to decide whether to participate."

Kristine Grow, spokeswoman for America's Health Insurance Plans, said that many members of her trade group "are waiting until the very last moment to make these decisions."

If Congress comes up with an agreement before the start of ACA enrollment on Nov. 1 to continue the payments next year, insurers and health commissioners alike hope federal officials will let insurers revise their rates. In many places, they could be lowered.

Democrats on Tuesday reiterated their interest in striking a deal. "Let's pick back up right where we left off, and let's do it right now," Murray said.

"The clock is ticking, Democrats are at the table, and I hope Republican leaders will now allow us to get back to work on lowering costs for patients and families and stabilizing the markets," the senator said. "We don't have a minute to spare."

Speaking to reporters Tuesday, Trump said he was "disappointed in certain so-called Republicans" who would not back the Cassidy-Graham bill.

The president had declined to speculate on whether he wanted lawmakers to actually vote on the measure given its certain failure.

"It's going along, and at some point, there will be a repeal and replace," Trump said.

In turning away from its health-care goals for now, Senate GOP leaders also are leaving unresolved the future of the Children's Health Insurance Program. Funding for CHIP will expire on Sept. 30 unless Congress reauthorizes the program, which was created 20 years ago for the children of the working poor. It now serves nearly 9 million families.

Earlier this month, Hatch and the Senate Finance Committee's ranking Democrat, Sen. Ron Wydenm, Ore., reached an agreement that would have extended the program for another five years. Most states have enough money through a hybrid of federal and state funds to continue their CHIP programs until next year, though a few would start to run out this fall.

Republicans sought to frame the outcome on the Cassidy-Graham plan as only a temporary setback – albeit one that repeats seven years of futile effort on the ACA. Graham vowed to return to his bill after the tax reform effort.

But the tax endeavor faces many obstacles and could stretch on for months, even though party leaders have said they hope to wrap it up by the end of the year. Complex policy and political disagreements among Republicans have yet to be sorted out.

Graham repeatedly blamed concerns about "process" more than "substance" for Tuesday's defeat. In the future, he said, he hopes more committee hearings and a more deliberative effort will help get Republicans across the finish line.

Democrats remain firmly opposed to any repeal, however. And the procedure that Graham envisions – more hearings, increased transparency and a slower pace – could give rise to new complications and resistance and perhaps lead to a different kind of bill as the end product.

"The one thing I don't want to do is disrupt the health-care system any more than it's being disrupted already," Graham said. "But I cannot tell you that I believe there's any way to fix Obamacare. I think it's beyond being repaired."

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The Washington Post's Kelsey Snell, David Weigel and Mike DeBonis.