Obamacare -- Why Republicans Zeroed Out the Individual-Mandate Penalty

Senator Chris Murphy speaks on Capitol Hill in Washington, D.C., December 13, 2018. (Joshua Roberts/Reuters)

Senator Chris Murphy has a bizarre Twitter thread claiming that Amy Coney Barrett’s confirmation is the final stage in a Republican plot to destroy Obamacare. There are numerous problems with it: It misrepresents the Fifth Circuit’s ruling on the current case, for example, and it curiously fails to mention that Barrett herself participated in a “mock court” on that case where she allowed the law to stand. Indeed, there’s an argument she should recuse herself to be fair to Obamacare’s opponents.

But here I wanted to discuss a more obscure claim, because it gets at something that is kind of weird about how Obamacare is currently written. When Republicans killed the individual mandate, they didn’t remove it from the law entirely; they reduced the penalty to $0 while leaving the mandate itself — the language telling Americans they have to buy health insurance — in place. Murphy calls this curious and “purposeful,” implying Republicans did it to set up the lawsuit. (I won’t bore you with the details on how this relates to the legal claims, but see here for more.)

The documented history of the provision is far less interesting. The GOP used the “budget reconciliation” process to repeal the mandate in 2017, as part of that year’s tax bill. A reconciliation bill can’t be filibustered in the Senate, but every change it makes must affect the budget. Reducing a penalty to $0 affects the budget; changing other language in the law does not.

In fact, not only was the $0 penalty an effort to comply with reconciliation rules, but the Senate parliamentarian had rejected an earlier attempt to kill the mandate more broadly. Here’s the history, as reported by the Washington Post in March of 2017, when Republicans were pursuing their doomed repeal-and-replace efforts:

In early 2016, Republicans passed a test run of a bill via reconciliation that got all the way to Obama’s desk. (He vetoed it, duh.)

In that process, a parliamentarian held Republicans up by ruling that one of the central pieces of their bill, eliminating the individual mandate that people have health insurance or else pay a tax, wasn’t directly related to the budget and couldn’t be passed under reconciliation.

Republicans were forced to get creative to undo a central part of Obamacare without a filibuster from Democrats.

“Republicans came back and said: ‘We can’t include a straight repeal of the mandate, but can we just dial the penalty for violating the mandate down to zero?’” [Molly Reynolds, a congressional expert with the Brookings Institution] explains. “And the parliamentarian said that was okay.”

In the end, the 2016 test repeal-replace legislation passed with the individual mandate intact but with a $0 penalty if you don’t have health care.

That’s more or less how Republicans have crafted their replacement bill in 2017: The individual mandate isn’t struck out of the bill, but it wouldn’t be enforced.

Fully repealing the mandate wasn’t an option, and it isn’t “curious” that they looked for a different route. Blame the parliamentarian.

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