The revised Senate Republican health insurance bill released Thursday makes a major change from the previous version in an effort to placate conservative lawmakers. But the new version still includes the big cuts to Medicaid that more moderate Republican senators have said they don’t like.
That creates a tricky tension point as Republicans aim to vote on this legislation, which would repeal and replace parts of Obamacare, as soon as next week: If the Republican senators who were holdouts before because they opposed the Medicaid cuts refuse to backtrack from their public stances, this bill will die. Remember, for the bill to pass on a party-line vote, Senate Majority Leader Mitch McConnell and other party leadership must persuade 50 of the Senate’s 52 Republicans to back it. Two, Sen. Susan Collins of Maine and Sen. Rand Paul of Kentucky, have said they oppose it.
Here’s a quick rundown of the biggest changes in the new version of the Better Care Reconciliation Act and how they affect the legislation’s chances of passage:
A variation on a provision dubbed the “Cruz amendment” after its author, Texas Sen. Ted Cruz. This is the biggest change, both in terms of policy and politics. The amendment would essentially allow insurers who sell the highly regulated Obamacare plans that cover a broad range of services to also sell skimpy or high-deductible plans. (There are other important details, but that’s the gist of it.)
Since most corporations prefer to be subject to fewer regulations, this amendment might sound like a win for insurance companies. But one of the insurance industry’s largest advocacy groups, America’s Health Insurance Plans, circulated a memo this week condemning the amendment, and the Blue Cross Blue Shield Association, a lobbying group representing one of the most important insurers in the marketplaces, wrote to senators to call the proposal “unworkable.” The insurers’ concerns are related to the issues that policy wonks have been warning about: If the Cruz amendment became law, healthy people would flock to the unregulated, cheaper market, leaving the Obamacare markets full of people with high health care costs. The updated bill sets aside more money — an additional $70 billion — to give to insurers to offset the costs of those sicker enrollees, as well as $132 billion in grants to states to stabilize insurance marketplaces.
The option to offer skimpy plans is aimed at winning over deeply conservative Republican senators including Paul, Cruz, Ron Johnson of Wisconsin and Mike Lee of Utah, who have argued that the earlier version of the bill preserved too much of Obamacare. But the new version lands in an awkward middle ground: It still falls short of the level of deregulation that the Cruz amendment aims to achieve, but it also goes further than what some senators have said they can support, because it could leave people with pre-existing conditions open to higher costs. We should also note that Senate Republican leaders, in their updated draft of the legislation, left this provision in brackets, leaving open the possibility that they will remove it.
A new $45 billion fund targeted toward opioid addiction treatment (the previous bill included $2 billion). That provision is aimed at Sens. Shelley Moore Capito of West Virginia and Rob Portman of Ohio, who represent states with high rates of deaths from drug overdoses.
Medicaid expansion under Obamacare opened up treatment options in many states experiencing high rates of opioid deaths and addiction. If the Medicaid expansion is phased out, which the Senate bill proposes to do, that’s a problem not only for funding treatment but also for keeping existing clinics and treatment centers up and running. Advocates and experts say that $45 billion is a tiny fraction of the money that would be needed to make up for Medicaid cuts and that targeted funding is a poor substitute for guaranteeing that addiction treatment is covered.
Eliminating two tax cuts, included in the original bill, that affect individuals who earn more than $200,000 per year. (Obamacare created several new taxes, largely aimed at high-income individuals, to help pay for the increased costs associated with the law.) This is aimed at more moderate GOP senators, who are leery of the public perception of the bill as cutting taxes for the rich while cutting some health care funding for the poor. Those two taxes will bring in $231 billion over 10 years, according to the Joint Committee on Taxation; a big chunk of the money would go to bolstering the private marketplaces, rather than reducing cuts to Medicaid. This could pose a problem for moderates who have spoken out against the Medicaid cuts.
Allow funds in health savings accounts to be used for insurance premiums, meaning people could use pre-tax dollars to cover premiums, which isn’t currently allowed. This could benefit people who earn enough to save money in these accounts but would do little for people with low incomes who currently use subsidies to pay for the majority of their coverage.
Earlier this week, we listed nine members of the Senate who had objections to the original Senate bill. So let’s look at how these changes may or may not address their concerns.
The Cruz amendment may be the biggest change from the original bill, but perhaps the most important news here is not what has changed but what was mostly left alone: the Medicaid cuts. The bill does make some changes from the previous version, allowing for additional state spending during public health emergencies, for example. But the cuts remain dramatic compared with what funding levels would be under current law, and those proposed changes have drawn intense coverage in both national and local news outlets. Much of that coverage has suggested that the $772 billion in Medicaid cuts included in the previous version of the bill, which are largely intact in this legislation, will negatively affect seniors, children and states’ budgets.
Some Republican senators and Trump administration officials have defended the reductions as appropriate limits on Medicaid spending and a move toward keeping the program under control.
Sen. Dean Heller of Nevada, Sen. Lisa Murkowski of Alaska, and Sens. Collins, Capito and Portman have long said that they are uncomfortable with these Medicaid cuts.
Recently, Kansas Sen. Jerry Moran said he was worried that the cuts might hurt the health care of “people with disabilities, the frail and elderly.”
It’s possible that Capito and Portman could argue that the additional opioid funding will help some of the low-income people who also benefit from Medicaid, or that Murkowski could be won over by a provision in the new bill that seems designed to offer some special funding to Alaska’s marketplace. But at least at first glance, it’s hard to see how Collins, Heller and Moran can back legislation that includes the same Medicaid cuts that they previously criticized. Collins has already publicly said she will vote no on a motion allowing the bill to move forward:
Loosening Obamacare regulations
Cruz and Lee have suggested that they will back this legislation if it includes a provision that loosens Obamacare rules, and some of the rhetoric from Johnson and Paul suggests they feel similarly. But this bill may fall short of the changes they requested, which demonstrates the razor-thin line between the moderate and conservative wings of the party that McConnell is attempting to walk.
Capito has said she opposes the Cruz amendment because of the way it might affect care for people with pre-existing conditions. McConnell has reportedly asked the Congressional Budget Office to evaluate the bill both with and without the Cruz amendment. If the CBO concludes that the looser Obamacare regulations will result in unaffordable health care costs for many Americans with pre-existing conditions, some more moderate senators are likely to push for the removal of this provision, even if that irritates the party’s conservative wing.
If the budget office concludes that the Cruz amendment will not have adverse effects on people with pre-existing conditions, that will be a boon for Republicans, allowing them to keep a provision that conservatives really like without alienating more moderate senators.
So assuming the watered-down version of the Cruz amendment passes muster with the conservative wing, Republicans could have the votes of Cruz, Lee and Johnson.
Paul is different. The Kentucky senator has repeatedly said he opposes any health care legislation that creates a federal entitlement. This version of the bill, like the previous one, in effect does create an entitlement: People with incomes below 350 percent of the federal poverty line automatically qualify for subsidies to buy insurance. If he sticks to his guns, it’s hard to see him voting for it.
So if you’re counting along, at first glance, it seems like the new Senate Republican health insurance bill starts with four “noes” (Collins, Heller, Moran and Paul) and three “maybes” (Capito, Portman and Murkowski). This is better than the nine holdouts from the first version, but it still leaves the Republicans with about 45 senators backing a bill that requires 50.
How could the Republicans win the vote?
Republicans are expected to push to pass this bill next week. The first step would be what is called a “motion to proceed,” which begins the formal process in the Senate. Late last month, five Republican senators (Collins, Paul, Heller, Lee and Johnson) said they disliked McConnell’s original draft so much that they would not back the motion to proceed, which led McConnell to delay the vote and rewrite the bill.
If the Republicans pass this motion, they will next start voting on amendments to the bill and ultimately the bill itself. Whether the bill passes would likely depend on whether these senators get the changes they want.
Here are some important questions to keep an eye on in the next week:
- Will senators flip-flop and suggest that issues they previously raised are no longer a concern, even if they aren’t addressed in the bill? It’s one thing for a senator like Moran to defend Medicaid spending even though he represents a deeply conservative state. It’s quite another for him to be one of the votes that stops Republicans from partially repealing Obamacare.
- How will the CBO interpret the revisions to the bill? And will the Senate even wait for the CBO score before it makes the motion to proceed? If the budget office concludes that some of the changes meaningfully reduce premiums, that could move some holdouts toward this bill. A bad score could be the final nail in the bill’s coffin.
- Can President Trump, Fox News and other powerful forces in the GOP turn this vote into a party loyalty test? Trump and his aides are expected to lobby holdout members like Heller and Paul.
- Can Democratic groups and liberal activists keep up their intense opposition to this bill and spook Republicans like Heller, Collins and Colorado’s Cory Gardner, who are in states Hillary Clinton won in 2016?
- Once the bill is on the floor, will McConnell commit to holding votes on amendments that might address holdouts’ concerns, such as reducing the Medicaid cuts?
The GOP has made repealing Obamacare a signature pledge since the law was passed in 2010, and if the party is going to achieve that goal, the next week will be critical.