Senate GOP leaders are poised to release an Obamacare overhaul that clearly tries to woo the moderate members of their party while also keeping spending in check and giving conservatives a few goodies, too.
Wednesday afternoon, The Health 202 scooped the major details of the draft health-care legislation that Senate Majority Leader Mitch McConnell, R-Ky., wants to bring up for a vote next week. Like the House bill passed in May, the Senate version would put big dents in the Affordable Care Act, repealing just about all of its taxes, pulling back on Medicaid expansion and ditching the individual mandate to buy coverage and the employer mandate to offer it.
But the Senate bill contains three elements McConnell is betting will win over a half dozen or so moderates who remain skeptical but whose votes are crucial to overall passage (remember: the majority leader needs only 50 votes since arcane budget rules are being applied to the measure, meaning he can lose just two Republicans). McConnell's draft, hashed out behind closed doors, basically retains Obamacare's insurance subsidy structure — with just a few tweaks — takes a gentler approach than the House bill in the short-term to Medicaid expansion, and wouldn't allow states to opt out of key protections for patients with preexisting conditions.
The idea, aides and lobbyists say, is to provide a softer landing for people at lower ends of the income spectrum than under the House bill. That measure based the subsidies only on age and didn't peg them to actual premiums, resulting in estimates of dramatic cost spikes for some Americans and prompting a heavy onslaught of public criticism that spooked many House moderates.
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The Senate bill tries to fix that problem — sort of. Its subsidies closely mirror Obamacare subsidies, which are currently available to Americans earning between 100 percent and 400 percent of the federal poverty level. Starting in 2020, under the Senate bill, this assistance would be capped for those earning up to 350 percent — but anyone below that line could get the subsidies if they're not eligible for Medicaid. As under the ACA, the subsidies would be pegged to a benchmark insurance plan each year, ensuring that the assistance grows enough over time to keep coverage affordable for customers.
McConnell is also offering moderates an approach to Medicaid he hopes will be more politically palatable to them. It's true the draft proposes even deeper cuts to Medicaid than the House version by tying federal spending to a slower growth index. But that wouldn't kick in for another seven years, well past moderate senators' next reelection battles. And it doesn't fully end the ACA's Medicaid expansion until five years from now, gradually easing down the extra federal payments over three years starting in 2021.
The Senate bill also retains the ACA's protections for patients with preexisting conditions. It eliminates the House bill's pathway for states to lift a ban on insurers from charging people with serious medical conditions higher premiums, which would have been another political hotbed for moderates. It does expand the use of certain "1332 waivers" to give states more flexibility — a provision that conservatives like Sen. Ted Cruz, R-Texas, wanted — but those waivers don't open the door to ducking the preexisting protections.
The Senate bill would also provide funding in 2018 and 2019 for extra Obamacare subsidies to insurers to cover the cost-sharing discounts they're required to give the lowest-income patients. Insurers have been deeply concerned over whether the subsidies will continue, as the Trump administration has refused to say whether it will keep funding them in the long run.
With this approach that sticks a little closer to existing law, McConnell is hoping to win over Republicans in states that embraced parts of the ACA, like Lisa Murkowski of Alaska, Rob Portman of Ohio, Shelley Moore Capito of West Virginia and Dean Heller of Nevada. Their votes are absolutely crucial to the whole effort to repeal and replace parts of Obamacare, the promise Republicans made time and time again over the past seven years and which McConnell is determined to fulfill.
Even Wednesday, many members expressed deep skepticism toward elements in the draft as it took shape. "Up to this point, I don't have any new news - tomorrow we will see it definitively - that would cause me to change that sentiment," Capito told The Washington Post's Sean Sullivan, Kelsey Snell and Juliet Eilperin Wednesday.
Many moderates are still likely to be displeased that the Senate draft will almost certainly result in significantly more uninsured people than under the ACA, although it could look a little better than the House version on that measure, which is estimated to cost 23 million people their coverage in a decade. All of this won't be known for sure until the Congressional Budget Office score is released, likely on Monday. Furthermore, the measure retains a provision to strip Medicaid funds from Planned Parenthood clinics for one year, potentially alienating Murkowski, who supports abortion rights.
So what do conservatives get out of this bill? Big cuts to Medicaid further down the road and a repeal of nearly all of Obamacare's taxes. Under the Senate draft, federal Medicaid spending would remain constant for three years. In 2021, it would be transformed from an open-ended entitlement to a system based on per-capita enrollment. Starting in 2025, the measure would tie federal spending on the program to an even slower growth index, which in turn could prompt states to reduce the size of their Medicaid programs.
Conservatives, and the health-care industry at large, will also be pleased that the draft proposes repealing all of Obamacare's taxes except for its so-called "Cadillac tax" on high-cost health plans in language similar to the House version. Senators previously toyed with the idea of keeping some of the ACA's taxes.
But there's a strong chance the Senate bill could spark a revolt on the right. Conservative groups like the Heritage Foundation and Americans for Prosperity wanted to erase Obamacare's Medicaid expansion right away, and they're also likely to view the Senate GOP's approach to subsidies as another big, bad government entitlement. Antiabortion groups may oppose the measure too since it removes the House bill language restricting federally subsidized health plans from covering abortions, which may have run afoul of complex budget rules.
Aides stress the GOP plan is likely to undergo more changes to garner the votes Republicans need. It's in discussion draft form, meaning elements could be added or stripped out over the next week as Republican leaders try to propel it toward a vote before the end of next week. And there are ongoing conversations with the Senate parliamentarian over which provisions can even be included under rules governing what can go in a budget reconciliation bill.
And don't forget that even if this bill passes the Senate, there's another steep hurdle. It would have to pass muster with the more conservative House before heading to President Trump's desk for a signature. And the House already had a difficult time passing its own version, meaning none of this is assured to become law.