Senate Parliamentarian Says GOP Obamacare Replacement Goes Too Far, Rules Against Planned Parenthood Defunding

Image courtesy of Michael Kappel

As you may be aware, the Republican effort to repeal and replace the Affordable Care Act is being pushed through Congress as a budget resolution, meaning it only needs a simple majority in the Senate (as opposed to 60 votes) to pass. However, budget resolutions are also very limited in what they can do, and today the Senate Parliamentarian issued her opinion that several key measures of the Senate replacement bill go beyond the scope of what’s allowed.

Budget resolutions must abide by the so-called Byrd Rule, which restricts the scope of such legislation to matters directly related to the budget. Efforts to enact policy or make statutory changes that don’t involve spending or revenue are more likely to trigger the 60-vote standard.

Today, the nonpartisan Senate Parliamentarian sent her findings to lawmakers. According to the brief on those findings, released by Democrats on the Senate Budget Committee, several aspects of the Better Care Reconciliation Act run afoul of the Byrd Rule, including the controversial clause that bars Planned Parenthood from receiving Medicaid funds. Similarly, the proposal to block tax credits for insurance policies that cover abortion (whether or not the recipient ever seeks such a procedure) would need to meet the 60-vote threshold to be enacted as law.

Also included in the list of troublesome parts of the bill is the GOP plan to let states opt out of requiring that their Medicaid alternative plans cover the “Essential Health Benefits” established by Obamacare. Parliamentarian Elizabeth MacDonough is still reviewing the proposal to allow states to seek waivers to eliminate the Essential Health Benefit requirement for all insurance plans within a state.

The GOP had also planned to hand over control of the Medical Loss Ratio (MLR) to the states. The MLR is the percentage of an insurance company’s premium revenue that must be used to cover medical claims by policy holders. The Affordable Care Act established a nationwide MLR of 80% for insurers in the individual market and 85% for providers selling large-group plans.

So, say you run an insurance company and that brings in $1 million a year in premiums from customers in the individual market. You can spend no more than 20% of that money on administrative costs and other non-medical expenses. Beyond that, if you don’t spend that full $800,000 on qualifying payments, then you have to issue refunds to your customers.

The BCRA seeks to let states determine how each would set the MLR for insurers in their state. That means states could — as several did in the pre-Obamacare era — set 0% MLRs, allowing insurance companies to spend as much of their customers’ premiums on whatever they want.

However, since this proposal has nothing to do with the budget, the Parliamentarian has flagged it as violating the Byrd Rule.

The question is whether or not the GOP leadership, which is still planning to move forward with some sort of vote next week, will heed the Parliamentarian’s guidance and strike the problematic sections of the BCRA. Doing so, particularly the Planned Parenthood and abortion tax credit clauses, could cause some hardline conservative Republicans to back away from supporting the bill.

For now, the GOP is playing it coy.

“The Parliamentarian has provided guidance on an earlier draft of the bill, which will help inform action on the legislation going forward,” a rep for the Budget Committee’s Republican members said in a statement on Friday.

Sen. Bernie Sanders, the Ranking Member of the Budget Committee, applauded the Parliamentarian’s ruling, saying that it proves “once again that the process Republicans have undertaken to repeal the ACA is a disaster.”

Majority Leader Mitch McConnell is still planning for a procedural vote next week to open up debate on the Republican repeal plan, though it’s still unclear what exactly will be debated if the GOP gets the 50 votes necessary to move forward. Neither the BCRA nor the alternative, straightforward repeal-only plan have sufficient support at the moment.