GOP Healthcare 2.0: What's Likely To Change, And Why It Won't Be Voted On Anytime Soon

Following a futile Tuesday-night attempt to unite on ACA repeal strategy, Vice President Mike Pence and House Republicans convened again Wednesday to hash out a deal.

But Height Securities analysts Andrew Parmentier and Stefanie Miller weren't hopeful for a resolution.

“We think chances are a toss-up at best that Republicans emerge with a repeal package that can pass out of the House this week,” Parmentier and Miller wrote in a Thursday note.

A Guaranteed Roadblock

The primary issue is appealing to a politically diverse assembly. With conservative members of the Freedom Caucus crafting the deal, their traditional terms could isolate House moderates and limit votes to pass the measure.

“Furthermore, every day this doesn’t get done, it becomes harder for House Majority Whip Steve Scalise (R–LA) to track down the necessary votes within the Republican caucus as the flaws of repeal become more apparent to voters and their Congressional representatives,” the analysts wrote.

In the chance of a House approval, the proposal would still encounter resistance in the more moderate Senate and require “softening” for members fearful that millions of constituents would lose coverage. In particular, the opt-out clause for Essential Health Benefit (EHB) coverage and authorization to charge for pre-existing conditions would not be well received among Senate Republicans.

“It is widely believed that, at the very least, the EHB provision would not qualify to move via reconciliation in the Senate, meaning it would need 60 votes in order to pass — which we consider extremely unlikely as this would require Democratic support,” Parmentier and Miller wrote.

Unlikely Alternatives

But the analysts do not see House Republicans compromising on those elements or endorsing more moderate policies.

“In light of what we saw two weeks ago in the House, where the Republican caucus demonstrated it would be willing to let ACA repeal fail rather than compromise on policy that doesn’t pass muster for ideological beliefs about what repeal should look like, we see very little chance that either side would be willing to compromise at this later stage,” they wrote.

And it’s even less likely that the Democrats step in to mediate. The intervention of more conservative Democrats could help Republicans craft a bill worthy of moderate standards and meriting Congressional approval.

“We think there is almost no chance this happens,” Parmentier and Miller wrote. “From a policy perspective, we expect many Democrats would be happy to make fixes to the ACA, but politically it is in their best interest to stay out of this debate and continue to let the Republicans struggle to fulfill their seven-year campaign promise.”

Forging Ahead

Despite the challenging circumstances surrounding the Republican repeal, Height doesn’t consider the issue closed.

“Bottom line: We continue to believe that an ACA repeal-and-replace 2.0 is something Republicans must try to pass,” the analysts wrote. “Congress begins a two-week long recess this Friday, so if the House doesn’t act this week the next best opportunity would be the first two weeks of May.”

The Health Care SPDR (ETF) (NYSE: XLV), which steadily rose between the 2010 passing of the Affordable Care Act and August 2015, popped nearly 0.1 percent Wednesday prior to the Republican meeting. The ETF was valued around $74.30 as of publication Thursday.

Related Links:

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ACA Repeal Efforts May Be ‘Dead For Now’

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Image Credit: By Caleb Smith; Office of the Speaker of the House - https://twitter.com/SpeakerRyan/status/796828886646587394, Public Domain, via Wikimedia Commons