GOP Senators Signal They’re On Board With Big Medicaid Cuts

This story has been updated.

It is now the Senate’s turn to wrestle with the bill to repeal the Affordable Care Act, and Republican lawmakers in the upper chamber huddled behind closed doors Tuesday afternoon to begin drafting their own legislation.

One of the major issues Senate Republicans must grapple with is the fate of Medicaid. The House bill slashes more than $800 billion dollars from the program, which the Congressional Budget Office estimated would cause 14 million people to lose coverage over 10 years.

As he exited the meeting Tuesday, Sen. Orrin Hatch (R-UT) signaled that the Senate may pursue similarly deep cuts.  “We’ve got to get it under control. Right now it’s out of control,” he said of Medicaid’s budget. “It’s going to be really out of control if we don’t do something.”

Sen. Ted Cruz (R-TX) echoed this sentiment, telling reporters: “I think we need reforms that put Medicaid on a long-term fiscally sustainable path, that constrains the exploding cost curve.”

Other Republican senators, pressed on the future of Medicaid, engaged in some linguistic gymnastics.

…Medicaid spending is higher than pre-Obamacare rates. And since Republicans promised to repeal Obamacare, it's just going back to normal.

— Paul McLeod (@pdmcleod) May 9, 2017

Gutting Medicaid is easier said than done, even with a Republican-controlled House, Senate and White House. Twenty of the Senate’s 52 Republicans represent states that expanded Medicaid, and Republicans can only afford to lose two votes when a health care bill finally comes to the floor.

“We have a very narrow Republican majority,” noted Cruz.  “We are going to have to find legislation that can command the support of 50 senators. We need senators across the ideological spectrum, senators from Medicaid expansion states and non-Medicaid expansion states to all have their concerns heard and reflected in the final bill.”

But even purported defenders of Medicaid funding and the Medicaid expansion sounded open to—or at least resigned to—major cuts.

Sen. Rob Portman (R-OH) stressed the importance of “not pulling the rug out from under people,” but floated the idea that the a more generous system of tax credits could “pick up some of these people” that lose Medicaid.

Portman admitted upon further questioning that the increased federal funding for the Medicaid expansion under Obamacare could be terminated by the Senate bill, but stressed that “there would also be a stabilization fund, and tax credits that aren’t available currently.”

“Our concern is that we need a softer landing to give states time to pick up the slack and continue to provide coverage,” he said.

The House bill, the American Health Care Act, sought to overhaul Medicaid in two major ways. Firstly, it phased out the ACA’s Medicaid expansion by freezing enrollment in 2020. Secondly, it would transform the larger program into a per capita cap system, meaning that instead of an unlimited match rate, states would received federal funding that was capped per enrollee.

The first change has gotten more attention, for the tensions it brings between expansion state and non-expansion state senators. But the second change will bring cuts to the program that get larger with time, as the metric the House bill uses to annually raise the caps grows more slowly than typical Medicaid spending.

“Clearly the House has done some important work,” Sen. Roger Wicker (R-MS) told reporters Tuesday. “I think we’d like to take the Medicaid provision and engineer a softer landing and eventually get to the same place”

After a GOP Senate lunch with Vice President Mike Pence and the entire Republican conference, members stressed that the health care conversations were “general” but that Medicaid was discussed.

“We’re just trying to bring everybody up to speed on what the options are and what the impacts are and what the costs are,” Sen. Mike Rounds (R-SD) told TPM.

Sen. Pat Toomey (R-PA), who is part of a 13-member health care working group that met before the lunch, said that there was “a lot of merit to the House’s approach, conceptually” with the per capita cap system, while adding that that he was “not sure” if the entire conference agreed.

The House bill passed by only two votes. Many House moderates who held their noses and voted for the Obamacare repeal bill stressed that they were assured the Senate would strip out some of its harshest provisions, including the Medicaid cuts.

The message Tuesday from Senate’s health care working group, however, was: Don’t hold your breath.

“We want to pay close attention to what the House has done and try to keep as much of that as we can,” Hatch told reporters.