After another ACA repeal attempt fails, the GOP faces tough choices

As some mourn and others cheer the demise of the Graham-Cassidy bill, which aimed to repeal and replace the Affordable Care Act, there is little doubt in anyone's mind that Republicans will continue their push for conservative healthcare reform.

"It's like a zombie that won't stay in the ground," said John Gorman, a former CMS official who now consults with government-sponsored health plans.

The GOP's determination stems from seven years of campaigning and promising constituents that they'd do away with Obamacare. But questions remain on what—and when—they'll try again.

One thing is clear: Chances are slim that Republicans can go it alone anytime soon. A procedural route that allowed them to pass a repeal-and-replace bill in the Senate with a simple majority expired Sept. 30. That means another attempt to modify the ACA would need Democratic support. Perhaps as a threat to his own party, President Donald Trump last week said he's willing to negotiate with Democrats on a bipartisan bill, with the hope of ironing something out by early next year.

More immediately, lawmakers are likely to revisit a bipartisan effort fronted by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) to stabilize the individual market in 2018, according to Evan Siegfried, a GOP strategist. Those efforts, which also sought to give states increased flexibility in their Medicaid programs, were thwarted when Senate Majority Leader Mitch McConnell made Graham-Cassidy a priority.

There is true concern on both sides that without a legislative fix, premiums could end up being too high for consumers or they may find themselves with few or no insurance choices. Nonetheless, partisan posturing could sink this effort, too.

"Democrats, in a political sense, have no incentive to work with Republicans," Siegfried said. "They want to wait until they are in the majority."

Not so, said Jon Reinish, senior vice president with Democratic communications firm SKDKnickerbocker. The party has been steadfast in its commitment to ensure access to affordable healthcare. "Democrats have made it clear from day one that their first priority is to strengthen the exchanges and stabilize the individual markets, bring costs down and increase choice," he said. "I don't see (the party) holding back from pursuing bipartisan solutions in the name of denying a win to Republicans."

After last week's special election in Alabama though, Democrats may be asking if the political will to work together exists on the Republican side.

The GOP received a proverbial warning shot when so-called establishment candidate Sen. Luther Strange lost a GOP primary runoff to Roy Moore, an archconservative who had the backing of former senior Trump adviser Steve Bannon.

"Their base wants (the ACA) to be repealed, consequences be damned," said Democratic strategist Craig Varoga. "This self-destructive behavior will only be exacerbated by Roy Moore's win in Alabama, which will provoke panic among mainstream Republicans who might face right-wing challengers in primaries next year."

GOP insiders agree. The base is frustrated that, despite controlling Congress and the White House, repealing the ACA has remained elusive. "The frustration is McConnell and Congress can't get this done, so we'll find people who can," said Chris Sinclair, a Republican strategist.

The challenge, however, is that the agenda is now shifting to tax reform, which the president spent much of last week stumping for on a trip to Indiana and on Twitter. That could give Republicans an opening to simultaneously scale back such Obamacare taxes as the individual and employer mandates and levies on the drug and device industries. "I wonder if we could see a grand compromise come forward in the months ahead as a tax bill is considered," said David Payne, a Republican strategist.

It's unclear if GOP leaders are willing to attach Obamacare provisions to a tax bill and risk undermining both legislative priorities at once, other Republican strategists argued.

With so much focus on the failed repeal effort last week, health policy insiders were dismayed that lawmakers seemed to forget there were pressing deadlines to reauthorize the Children's Health Insurance Program and ensure continued federal financing for community health centers. Both matters needed action by Sept. 30.

The chances that there will be action on either matter so soon after the defeat of the repeal bill are slim to none. "As they move on to things like the budget and tax reform, healthcare will be the forgotten stepchild," Democratic strategist Brad Bannon said.

Both of those causes have bipartisan support, so the questions that remain aren't if funding will be renewed, but when, and what will the consequences be for missing the fiscal year-end deadline. Congress could pass a bill that retroactively funds both programs from Oct. 1 to whenever the law is signed by the president, but will it be too late?

Health centers need funding certainty for staffing and contracting purposes, according to Dan Hawkins, senior vice president for policy and research at the National Association of Community Health Centers.

States, meanwhile, need to figure out if they'll have money to cover children and pregnant women under CHIP. Minnesota officials sent a letter to HHS in mid-September saying they would be out of funds by Oct. 1 and would have to start ending coverage for beneficiaries as a result.

At a broader level, for state lawmakers wishing to implement conservative health reform ideas, Medicaid 1115 and 1332 waivers may be their only recourse for now. Already, several states have pending requests to impose work requirements, lifetime limits and drug tests on Medicaid beneficiaries.

But even that pathway could be derailed—or at least sidetracked—if controversy swirling around HHS Secretary Dr. Tom Price continues, according to Tevi Troy, a former deputy HHS secretary in the Bush administration and the president of the American Health Policy Institute. Price has been under fire for his use of private jets on the taxpayer's dime. Trump was "not happy" with Price's actions and said, "We'll see" Sept. 27 when asked by reporters if he planned to fire the secretary. Late Sept. 28, Price announced that he would reimburse the Treasury Department for using the charter planes.

Others were not so sure what effect Price's exit would have on the CMS' review and approval of waiver requests.

"The person driving waiver efforts is Seema Verma, and she appears not to have an airplane problem," said Emily Evans, a health policy analyst at Hedgeye Risk Management.