Senate Republicans unveiled an Obamacare repeal bill Thursday that would impose deeper long-term cuts to Medicaid than the House version, eliminate the bulk of the Affordable Care Act’s taxes and offer tax credits for individual insurance plans that are technically more generous than the House’s versions, particularly for lower income people, but still far stingier than the subsidies under current law.
The release of the Senate bill, the “Better Care Reconciliation Act of 2017,” comes after two and a half months of secret closed door, GOP-only negotiations. Majority Leader Mitch McConnell can only lose two Senate Republican votes and still pass the legislation. Republicans have hinted that the Senate bill still could undergo changes to earn consensus before it is brought for a vote next week. The bill may also be tweaked to avoid violating the rules of the complicated reconciliation process, which Republicans are using to avoid a Democratic filibuster.
Nonetheless, it signals an approach that largely sticks to the House Republicans’ legislation—which the CBO said would result in 23 million fewer people with health coverage—that short changes the government assistance in health coverage, particularly for lower income people, and passes onto the states the decisions on how to make up for the shortfall.
The ACA’s Medicaid expansion would still be wound-down, as in the House bill, but in a more gradual process. The so-called transition phase would be longer under the Senate version, starting in 2021, with the federal match rate for the expansion population reducing overtime until 2024.
To appease conservatives wary of the longer period of expansion funding, the Senate bill introduces steeper cuts to the traditional Medicaid program. Like the House bill, the GOP Senate bill would transform the program from its current unlimited match rate into a system where states would be given a limited amount of money per enrollee in their program each year. The caps, starting in 2020, would rise at an inflation rate known as “consumer price index-medical” or CPI-M, which is slower than traditional Medicaid spending, meaning that over time the government spending on Medicaid would not keep with up with health care costs. However, starting in 2025, that inflation metric would switch to the consume pricer index-urban consumers — an even slower rate than the House bill, which stuck to CPI-M — meaning that the cuts would be further compounded in the long term.
The tax credits the bill offers sticks to ACA model in allowing them to scale with age. However, it cuts the consumer subsidies off at 350 percent of the federal poverty line, instead of the 400 percent under the current law. It also resets downward the percentage of medical costs insurers must cover in baseline plans: Instead of the ACA’s 70 percent of costs, plans under the new bill would only have to cover 58 percent of costs. The effect would be to shift more of the burden of the cost of care to patients.
Changing the benchmark for premium subsidies from the equivalent of a silver plan to a bronze plan is about a 15% across-the-board cut.
— Larry Levitt (@larry_levitt) June 22, 2017
One big question about the Senate bill was how it would treat coverage for abortions. The language released Thursday bars the use of the federal tax credits for any health insurance plans that cover abortion. The bill also defunds Planned Parenthood.
The bill seeks to allow states to loosen some of the ACA’s insurer mandates, such as the Essential Health Benefits, which mandate the 10 broad coverage areas insurers must offer. The legislation does this with beefed up versions of the waivers, known as 1332 waivers, that already exist under the Affordable Care Act.
The legislation also eliminates the ACA’s insurer and employer mandates.
Senate Republicans are seeking a short-term infusion of funding into the individual market that would come in the form of a four-year reinsurance program, which helps defray the costs of insurers’ most costly individuals, and a continuation of the insurer subsidies known as cost-sharing reduction payments through 2019. President Trump previously has threatened to halt these subsidies. It’s unclear whether these proposals will pass muster under the rules of reconciliation.
Senate Republicans met Thursday morning to discuss the bill proposed by GOP leadership. According to Sen. Bob Corker (R-TN), Republicans did not receive a copy of the legislation at the meeting, and Corker said he did not even have a physical outline highlighting the proposals since senators were just given a presentation. Coming out of the meeting, many Republicans stop short of weighing in directly on the bill and said they would need to read it in it’s entirely first.
Read the bill:
This post has been updated.