In a completely obvious maneuver, the Senate parliamentarian has kicked out the Health Insurance Rate Authority from the reconciliation set of fixes. The national rate reviewer would have had the ability to cancel premium increases across the country, in association with state regulators. But it has no primary budgetary impact, so out it goes.

“I’m crushed it’s out,” she said. But she added that she would bring it up with him one more time to try to make the case that it would be a legitimate use of reconciliation. “I’m going to make one last effort with the parliamentarian,” she said.

It’ll be a difficult effort. Reconciliation rules require that legislation must have a direct and substantial effect on the budget to qualify for the majority-vote procedure. Merely an incidental budget effect is not enough. Feinstein’s rate authority would save the government money by reducing private insurance premiums, which would then reduce the amount of subsidies needed — but such an effect is apparently too indirect for the parliamentarian to give it the thumbs-up.

I’ll remind everyone that this was basically the major carrot inside reconciliation, the one new thing that most people agreed would improve the bill significantly.

This was obvious from the moment it showed up in the President’s reconciliation proposal. I wrote the day it was released:

But there are a couple pieces of the proposal that could not really pass through reconciliation. The new federal rate reviewer, for example. I see no way that has a budget number attached to it, meaning it would be subject to a Byrd rule challenge. But this may be just what the White House WANTS. When I asked Pfeiffer about it, he said that they took the limitations of reconciliation into account, and that ultimately, what passes muster is up to the Senate parliamentarian. But there could be a vote to waive the parliamentarian’s decision, one that would require 60 votes. At that point, Republicans would have to make the choice to vote down a federal regulator devoted to making sure customers across the country don’t get gouged on their health insurance premiums. That’s smart politics, and I could see why they’d welcome such a vote.

Of course, because that would be smart, they’re just taking it out of the bill altogether and saving themselves the trouble.

Perhaps you’ll see a standalone bill on the rate review board in the future; it would mirror the vote in the House to repeal the insurance industry’s anti-trust exemption. You’ll notice that hasn’t moved in the Senate yet.