June 22, 2017; Washington Post
The GOP caucus in the U.S. Senate has released its version of legislation to “repeal and replace” the Affordable Care Act (ACA), or Obamacare, passed in 2010. The House passed the American Health Care Act (AHCA) in early May and sent it over to the Senate, which used it to develop the “Better Care Reconciliation Act of 2017.” NPQ has followed the AHCA and reported on its introduction and evaluation (“scoring”) by the Congressional Budget Office.
The Senate Republicans’ 142-page bill is still actually in the “discussion draft” stage and is an “amendment in the form of a substitute” to the AHCA, technically known as H.R. 1628. The Congressional Budget Office is expected to issue its scoring of the bill early next week. President Trump and Senate Majority Leader Mitch McConnell (R-KY) are contemplating a vote on the bill, including numerous amendments, as soon as next week, in order that it be passed before Congress’s scheduled July 4th recess.
The Washington Post has developed an excellent graphic comparison of key aspects of the ACA, the AHCA, and the Senate draft. Some aspects of the Senate draft legislation are less draconian than the House version, such as insurance subsidies being calculated using income, age, and geography, as the ACA currently does, rather than using the AHCA formula, which relies primarily on age as a criterion. However, the income levels required to qualify for subsidies would be lower than those under the ACA.
The Senate bill retains the AHCA language that effectively makes Planned Parenthood ineligible to receive Medicaid reimbursements for one year. It also provides the option for states to change the definition of “essential health benefits” required to be covered in plans sold in their states. The annual or lifetime caps on coverage included as part of the AHCA are not removed in either the AHCA or Senate GOP bills, but because the AHCA allows states to make changes in essential health benefits, some insured people may see their coverage limited. The Senate version goes further, allowing states to opt out of the ban completely.
Both the AHCA and the Senate GOP draft bill repeal most of the taxes imposed by the ACA to fund the legislation’s costs. One key exception to this is the so-called “Cadillac tax” on low-deductible comprehensive health insurance plans. Both bills allow for insurers to charge up to five times more to some customers than they do to others, up from three times more under the ACA. (The House bill may allow states to change this ratio, but it’s unknown whether this means the ratio could be greater than 5 to 1 in some states). Both bills expand the use of health savings accounts (HSAs) and increase the pretax amount that can be placed in these accounts.
How Medicaid is affected under the proposed legislation is critical, because about 20 percent of Americans receive Medicaid-paid services. In addition, much of the expansion in health insurance coverage since the ACA was passed was achieved as a result of Medicaid growth. While the ACA identified Medicaid as “an entitlement program with open-ended, matching federal funds for anyone who qualifies,” according to the Post, the AHCA and the Senate draft both would give states “a per capita or block-grant amount.” This is expected to dramatically decrease federal Medicaid spending. Technical provisions in the House and Senate bills differ, with the Senate bill starting the block grant program in 2021, later than the AHCA, but the annual increases in the Senate proposal would be smaller. This means that in the longer term, the Senate bill cuts more from federal Medicaid spending than the AHCA proposes to do.
Initial reactions to the proposed legislation have been almost uniformly negative and often harsh. A “die-in” outside McConnell’s Senate office Thursday morning by people with disabilities resulted in the arrest of 43 protesters, some in wheelchairs, who object to the proposed bill’s Medicaid cuts. Paramedics were called to the scene and there were Twitter reports of blood on the hallway floor.
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Senate Minority Leader Chuck Schumer (D-NY) said,
The way this bill cuts health care is heartless. The president said the House bill was mean. The Senate bill may be meaner. The Senate Republican health care bill is a wolf in sheep’s clothing. Only this wolf has even sharper teeth than the House bill.
House Minority Leader Nancy Pelosi (D-CA) called the bill “mean and heartless.”
“The Senate bill creates an illusion of being less draconian than the House bill, but is arguably more so” on Medicaid, said Sara Rosenbaum, a professor of health law and policy at George Washington University. Association of American Medical Colleges President and CEO Darrell G. Kirch, MD, said in a prepared statement:
We are extremely disappointed by the Senate bill released today,” the medical school association wrote. “Despite promises to the contrary, it will leave millions of people without health coverage, and others with only bare-bones plans that will be insufficient to properly address their needs.
Some Republicans are uneasy about the bill for different reasons. Referring to the draft released today, Sen. Rand Paul (R-KY) said, “It needs to look more like a repeal of Obamacare rather than that we’re keeping Obamacare.” Sen. Ted Cruz (R-TX) would like the bill to “do more to ensure consumers have the freedom to choose among more affordable plans that are tailored for their individual healthcare needs.” Sens. Mike Lee (R-UT) and Ron Johnson (R-WI) joined Cruz and Paul, issuing a joint statement saying they cannot support the bill in its present form, but they plan to work to negotiate changes to gain their support.
Virtually alone among Democratic legislators, Sens. Joe Manchin (D-WV) and John Tester (D-MT) have signaled a willingness to participate in the amendment process. Tester said, “We’ve got to have a solid debate on it, with as many amendments as we can to improve access to affordability.”—Michael Wyland