The Strangest Winner In Senate GOP’s Obamacare Struggles: Medicaid

Alice Ollstein contributed reporting.

If the Senate can make it through the hellish tunnel of show votes they’re currently in that gets them to the narrow legislation that keeps Obamacare repeal alive, it will be only after Republicans’ dreams of gutting Medicaid are abandoned — at least for now.

Two bills that would have imposed major cuts to the program both failed in votes that experienced significant Republican defections. More broadly, by last week, it was clear that the Senate GOP had overreached in seeking to overhaul the traditional Medicaid program within its Obamacare legislation. Try as they might, the GOP couldn’t get enough Republicans on board with a massive Medicaid overhaul to make the replacement legislation, the Better Care Reconciliation Act, passable.

“I have said all along that I felt that the Medicaid reforms should have been separate from the effort that we were undertaking with the Affordable Care Act fixes,” Sen. Lisa Murkowksi (R-AK) told reporters last week. “Medicaid reform, pretty significant reforms, here—they need to be done in a thoughtful and considerate ways.”

There might be a so-called “skinny repeal” that passes out of the Senate by Friday morning, but it’s expected not to touch Medicaid and include just a few provisions applicable to the individual market instead.

“For a lot of our members, maybe six or so, the Medicaid piece is that the big issue. So if you’re not dealing with that, it brings some of them along,” Sen. John Thune (R-SD) told reporters Wednesday.

That doesn’t mean Medicaid is entirely safe. Republicans warming to the skinny repeal plan are hopeful that the bill will go to a conference with the House-passed legislation, where lawmakers could work out an Obamacare replacement deal that cut Medicaid in ways that could still pass in the Senate.

“I think you get some reform to Medicaid, maybe not as robust as what we had out of the house,” Rep. Mark Meadows (R-NC), who leads a very conservative faction of House Republicans, said Wednesday.

At the very least, the ambitions to undertake an unprecedented overhaul of Medicaid have been tempered a bit, given the obstacles Republicans faced in the Senate.

The proposal that perturbed Murkowksi and other Republicans was replacement bill provision that would, for the first time, impose limits on the federal government’s per-enrollee contributions to the program. This would shift the tough decisions to the states on how to make up for a funding shortfall that would grow over time. Including it in the initial Obamacare replacement bill that narrowly passed in the House reflected a long-held dream of Speaker Paul Ryan, who bragged he’s been thinking about this type of overhaul since he was “drinking at a keg.”

Coupled with the phasing out of the ACA’s Medicaid expansion, one could argue that the Obamacare repeal effort was a Trojan Horse for drastically reducing the size of the safety net program.

But like Icarus, the budget hawks of the Republican Party flew too close to the sun by trying to overhaul Medicaid in bill ostensibly aimed at the individual insurance market.

While the issue flew under the radar in the House push-and-pull over the bill, it became a flashpoint in the Senate, where fights erupted over inflation metrics and side-deals to protect certain states were floated.

“Medicaid, except for the extension part of Medicaid, is not really a part of fixing the Affordable Care Act,” Sen. Jerry Moran (R-KS) said, after opposing the first version of the Senate replacement bill. “So we’ve coupled two things, both of which are very difficult. Kansas is a place that’s treated Medicaid payments very conservative. If there are people receiving those payments who don’t deserve them, deal with that issue.”

The politics around undoing the Medicaid expansion was always expected to be tricky for Republicans, since some hailed from states that expanded the program. But introducing draconian cuts on the entire program, and not just for expansion states, further riled the choppy waters.

It’s worth noting that neither Sen. Susan Collins (R-ME) nor Moran, both key figures in the death of the Senate replacement bill, represent non-expansion states (though Maine is voting on a ballot initiative to expand in November).

“There was, No.1, a misunderstanding of how the states have really gotten dug in and how hard it is to take something away once it is expanded,” said Katherine Hayes, a former GOP Finance Committee staffer who is now director of health policy at the Bipartisan Policy Center.

“But I think even more importantly … they were not thinking about the other populations that are served by the Medicaid program, including dual eligibles and those with disabilities,” she said.

Wavering Medicaid expansion Republicans like Sens. Rob Portman (R-OH) and Shelley Moore Capito (R-WV) did vote for a fantasy-land version of the replacement bill Tuesday evening, that included a proposal from Portman that would subsidize private insurance for low-income people kicked off the Medicaid rolls. The bill was expected to fail, since the Portman amendment hadn’t been scored and thus, required 60 votes. But the entire measure, which failed 43-57, was also well below having enough Republican support to pass if those procedural issues were worked out.

“What we put out last night was our attempt to satisfy those concerns and try to find the sweet spot. It wasn’t quite effective, but the game’s not over yet,” Thune told reporters Wednesday.

However, once scored by the Congressional Budget Office, a proposal like that would actually be unworkable for the process Republicans are using to repeal Obamacare, because it would be extremely expensive and likely blow up the deficit reduction numbers Republicans must meet.

The version of the 2015 repeal-and-delay bill that eliminated the expansion after two years, while not touching the traditional program, was also well below passage during Wednesday’s vote, with seven Republicans against it. One of those Republicans, Sen. Dean Heller (R-NV), has said explicitly he is willing to vote for the skinny repeal bill because it doesn’t touch Medicaid.

“Medicaid expansion has worked for the state of Nevada. So the skinny bill leaves entitlement reforms out of the bill. I’ve always said I’m for health care reform, I’m not for entitlement reform,” Heller told Politico.

He went on to say he was “worried” about what would happen if the skinny bill was then sent back to the House for conference.

That legislation could very well include the House bill’s big Medicaid cuts, and it could very well ultimately pass. But as of Thursday morning, there is no proof yet that there are 50 Republican senators willing to vote for a bill gutting Medicaid.