Senate talks continue; leaders plan to release bill Thursday
Vote on legislation possible by end of next week
Senate Republican leaders plan to release their health care plan Thursday, the first time the public – and their fellow GOP senators – will get to see what they have been working on behind closed doors.
And the non-partisan Congressional Budget Office is expected to release its analysis of the bill early next week, with a Senate vote possible before the July 4 recess.
Here’s a cheat sheet of what we know, don’t know and think we know on the policy front at this hour:
What we know:
An under appreciated element of the House bill was the extent to which it dramatically reformed the Medicaid program.
The Senate bill would keep that overhaul, curtailing federal support by sending states a fixed amount per enrollee, known as a per capita cap. This change, along with eliminating funding for Medicaid expansion, would reduce spending on the program by at least $800 billion over 10 years. States would also have the option of receiving a lump sum each year as a block grant, in return for even more flexibility on how to administer the program.
The waiver issue was all the rage in the House, and behind closed doors, has certainly been an area of contention in the Senate.
Senate leaders have decided to address the most contentious issue head on – they plan to remove the waiver option for community rating, which bans insurers from charging higher premiums to those with pre-existing conditions. They will leave, or add, waivers for the following regulations:
- Essential Health Benefits, which requires insurers to cover 10 main services.
- Medical Loss Ratio, which mandates insurers spend at least 80% of premiums on patient care.
- Actuarial Value, which dictates the average share of health care costs insurers must pick up.
- Age Rating Band, which restricts how much more insurers can charge older enrollees compared to younger ones.
And a note of caution: There is still no guidance as to whether these waivers will survive the Senate parliamentarian and be allowed to be in the final bill.
State stability fund
The House included $138 billion to help states and insurers cover pricey patients in a variety of ways, primarily through things like high risk pools, and to help lower consumers’ costs.
This will be in the Senate bill as well, but several moderate senators have pushed for *significantly* more money for this fund. It’s unclear how much will be added, but a sizable amount is likely needed to pacify senators like Susan Collins, who gave a private presentation on Maine’s now-defunct high risk pool and noted for it to be taken nationwide.
Of note, adding money to this fund (to the tune of $8 billion, targeted for those with pre-existing conditions in states that opted out of community waiver regulations) was positively *essential* to House Republicans passing their bill. This is a natural home for plussing up funding to appease senators (and a certain Oval Office inhabitant) wary of, say, charges that the bill is “mean.”
The House bill eliminated the Affordable Care Act’s subsidies, which are based on income and cost of coverage, and replaced them with tax credits based mainly on age that started at $2,000 per year and peaked at $4,000 a year.
That structure, according to analysts and Republicans alike, fell far short when it came to providing adequate financial help for lower income and older Americans.
The Senate is expected to make the tax credit more generous for these groups. There’s also been a significant push from people like Alaska Sen. Lisa Murkowski to add a geographic adjustment to the credit – something essential to ensuring her state isn’t disproportionately hammered by the new subsidy structure. However, it could also further alienate conservatives, who are already upset that the tax credits are too similar to Obamacare’s subsidies.
To what degree all of this would be implemented – or if it all makes it in the final structure – remains somewhat unclear, but the House bill included an $85 billion placeholder for the Senate to utilize, so there is room to maneuver in what would be a crucial component of securing moderate Republican support.
What we expect may help lock in wavering votes:
This is a central issue for Ohio Sen. Rob Portman, whose home state relies heavily on the ACA’s Medicaid expansion to finance its addiction treatment and rehabilitation.
The structure and size of the fund remains up in the air – Portman has made clear he’d accept it through Medicaid, or via a separate fund of sorts and $45 billion over a decade has been a number that has been mentioned. But it’s important enough to him – and to several other senators from states that have been crushed by the current epidemic – that it’s likely to find its way into the bill in some form or fashion. Still, the path isn’t entirely clear - conservatives have voiced concern about the new spending and structure of the fund.
Rural hospital funding
Keep a close eye on how Republicans try to address this issue – it may be key to securing the Murkowski’s support.
Alaska, according to analysts, would be hit particularly hard by the House version of the Republican American Health Care Act. The coverage losses and premium hits would be borderline catastrophic. Changes to the tax credit will address some of that, but funding for rural hospitals may be the best way to assuage some of her very real concerns.
What’s up in the air:
Short-term market stabilization
GOP Senators including health committee Chairman Lamar Alexander and Wisconsin’s Ron Johnson have called for some sort of short-term market-stabilization package to be included – provisions to essentially hold the markets over until a new law could be fully implemented. What that would entail is still very much unknown.
Would they guarantee Cost Sharing Reduction funding for an additional year? Would they allow individuals to utilize subsidies outside the Obamacare exchanges in areas insurers have abandoned entirely? These are very consequential near-term question for a number of senators – and answers (and what it would mean for the cost of an overall bill) are still lacking.
Medicaid growth rate
Conservatives are pushing to change the way the growth rate is calculated for how federal payments are made to states. The House bill would peg the growth rate to medical inflation.
A proposal that has been on the table in the Senate (and pushed heavily by Pennsylvania Sen. Pat Toomey) would, by 2025, shift measure to regular inflation, something that would result in significantly deeper spending reductions for the program. For conservatives, who call the program bloated and unsustainable, this would be a major win. But for more moderate senators, like Portman and West Virginia’s Sen. Shelly Moore Capito, it’s likely a non-starter. It would likely force states to cut benefits, enrollment and provider rates.
Medicaid expansion phase out
Obamacare’s Medicaid expansion is going away. The question is how quickly and in what form.
The House bill froze the ability of states to join the program and essentially eliminated the expansion by ending enhanced federal funding for new enrollees in 2020. People who were continuously enrolled would be able to maintain their coverage, but the program has a high churn rate, so the House authors worked under the assumption that expansion beneficiaries would quickly dwindle and the program would end on its own.
Senators and governors from expansion states have called that funding cliff unrealistic and too draconian. Senators pitched a seven-year glide path for the program. Senate GOP leaders have countered with a three-year glide path, starting in 2020, that would gradually drop the enhanced funding to the traditional match rate for expansion states over that period.
It’s still unclear whether that will fly with expansion state Republicans. How governors react will play a major role here, particularly in the case of Nevada, home to the most endangered GOP senator up for re-election next year, Dean Heller.
Like the House bill, the taxes will be repealed. The question is when.
The House bill, at the request of conservatives both outside and inside the halls of Congress, immediately repeals most of the taxes. The issue here is financing for the bill. Senate Republicans have made clear they’d also love to immediately repeal all of Obamacare’s taxes – but they’re adding new money via the tax credit, and the more gradual Medicaid expansion phase out, and to risk pools, and potentially to an opioid fund and rural hospital money.
And they’re doing all of that while being required to have *at least* $133 billion in deficit savings over a 10-year period (which is actually more than is in the House bill, according to CBO.) So they need to find that money somehow. Delaying the repeal of certain taxes is a nifty way to do it, but it’s something that is abhorrent to conservatives. So this remains an open question.
The House bill prohibits federal funding for Planned Parenthood for a year. This is a major issue for Sens. Collins and Murkowski – a potential deal-breaker for both – who oppose limiting funds for the group. But there’s a chance it’s something Senate GOP leaders may not have to grapple with at all. Many aides believe the Senate Parliamentarian will strike this provision down on Byrd Rule grounds.
There’s also the lingering issues of the tax credits. There is widespread speculation that they can’t attach Hyde language (no federal funds for abortions) to the new credits. Without it, conservatives may have even deeper problems with the credits (and it’s worth noting, conservatives are already quite uncomfortable with the credits themselves.) Should they lose the ability to attach Hyde language, plus the ability to defund Planned Parenthood, that would be a significant loss for the anti-abortion groups who have pinned major policy hopes on this bill.
This is an idea pushed by several senators – one that would markedly improve any CBO score’s coverage numbers. It could also play a huge roll in market stabilization, essentially forcing younger, healthier people into the marketplace and as such, lowering overall costs. But it’s something that would infuriate conservatives in the conference and talk of its existence in a final bill has faded in recent weeks. Experts also say it would be incredibly difficult to implement. We’ll see if it somehow comes back to life.
CNN’s Tami Luhby contributed to this report.