Senate Health Care Bill Includes Deep Cuts to Medicaid

By ROBERT PEAR and THOMAS KAPLAN
JUNE 22, 2017 - New York Times

WASHINGTON — Senate Republicans, who have promised a repeal of the Affordable Care Act for seven years, took a major step on Thursday toward that goal, unveiling a bill to make deep cuts in Medicaid and end the law’s mandate that most Americans have health insurance.

The 142-page bill would create a new system of federal tax credits to help people buy health insurance, while offering states the ability to drop many of the benefits required by the Affordable Care Act, like maternity care, emergency services and mental health treatment.

But the measure landed in rough seas ahead of a vote that Senator Mitch McConnell of Kentucky, the majority leader, wants next week. Four conservative senators, Rand Paul of Kentucky, Ted Cruz of Texas, Mike Lee of Utah and Ron Johnson of Wisconsin, announced that they would oppose it without changes — more than enough to bring it down.

“It does not appear this draft as written will accomplish the most important promise that we made to Americans: to repeal Obamacare and lower their health care costs,” the four wrote in a joint statement.

More moderate Republican senators, such as Dean Heller of Nevada, expressed their own qualms, as did the American Hospital Association, the American Cancer Society Cancer Action Network and the Association of American Medical Colleges.

“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.”

Once promised as a top-to-bottom revamp of the health bill passed by the House last month, the Senate bill instead maintains its structure, with modest adjustments. The Senate version is, in some respects, more moderate than the House bill, offering more financial assistance to some lower-income people to help them defray the rapidly rising cost of private health insurance.

But the Senate bill would make subsidies less generous than under current law. It would lower the income limit for receiving subsidies to cover insurance premiums to 350 percent of the poverty level, or about $42,000 for an individual, from 400 percent.

Older people could be disproportionately hurt because they pay more for insurance in general. Both chambers’ bills would allow insurers to charge older people five times as much as younger ones; the limit now is three times.

The Senate measure, like the House bill, would phase out the extra money that the federal government has provided to states as an incentive to expand eligibility for Medicaid. And like the House measure, it would put the entire Medicaid program on a budget, ending the open-ended entitlement that now exists.

It would also repeal most of the tax increases imposed by the Affordable Care Act — a capital gains tax cut for the affluent would be retroactive for this year — to pay for expanded coverage, in effect handing a broad tax cut to the affluent in a measure that would also slice billions of dollars from Medicaid, a health care program that serves one in five Americans, not only the poor but almost two-thirds of people in nursing homes. The bill, drafted in secret, is likely to come to the Senate floor next week, and could come to a vote after 20 hours of debate.

If it passes, President Trump and the Republican Congress would be on the edge of a major overhaul of the American health care system — about one-sixth of the nation’s economy.

The premise of the bill, repeated almost daily in some form or other by its chief author, Mr. McConnell, is that “Obamacare is collapsing around us, and the American people are desperately searching for relief.”

Mr. Trump shares that view, and the Senate bill, if adopted, would move the president a great distance closer to being able to boast about final passage of a marquee piece of legislation, a feat he has so far been unable to accomplish.

Democrats and some insurers blame the Republicans and Mr. Trump for sabotaging the law, in part by threatening to withhold subsidies used to help pay for deductibles and co-payments for millions of poor people covered by the law.

And President Barack Obama, who has been hesitant to speak up on political issues since leaving office, waded forcefully into the health-care debate Thursday, saying the Senate proposal showed a “fundamental meanness” that would harm anyone who gets old, gets sick or starts a family.

“The Senate bill, unveiled today, is not a health care bill,” Mr. Obama wrote on his Facebook page. “It’s a massive transfer of wealth from middle-class and poor families to the richest people in America. It hands enormous tax cuts to the rich and to the drug and insurance industries, paid for by cutting health care for everybody else.”

In a message to his supporters, the former president and Obamacare namesake urged people to demand real compromise from their lawmakers before senators vote on the Republican bill next week.

“I believe that it’s possible – if you are willing to make a difference again,” he wrote. “If you’re willing to call your members of Congress. If you are willing to visit their offices. If you are willing to speak out let them and the country know, in very real terms, what this means for you and your family.”

In the Senate, Democrats are determined to defend a law that has provided coverage to 20 million people and is a pillar of former President Barack Obama’s legacy. The debate over the repeal bill is shaping up as a titanic political clash, which could have major implications for both parties, affecting their electoral prospects for years to come.

Mr. McConnell faces a great challenge in amassing the votes to win Senate approval of the bill, which Republicans are trying to pass using special budget rules that will allow them to avoid a Democratic filibuster. But with only 52 seats, Mr. McConnell can afford to lose only two Republicans, with Vice President Mike Pence breaking the tie.

Democrats are unified in opposing the repeal efforts, and they have already assailed Republicans for putting the bill together without a single public hearing or bill-drafting session.

In the short term, the possible electoral consequences are more muted in the Senate than in the House, as only two of the Senate Republicans who face re-election next year, Mr. Heller and Jeff Flake of Arizona, are seen as vulnerable.

But Republican leaders still must contend with internal divisions that will be difficult to overcome. Numerous Republican senators from states that expanded Medicaid are concerned about how a rollback of the program could affect their constituents, and they face pressure from governors back home.

Some senators have concerns based on other issues specific to their states, including the opioid epidemic that has battered states like West Virginia and Ohio. And some of the Senate’s most conservative members could resist a bill that they view as not going far enough in dismantling the Affordable Care Act.

Senators will not have long to sort out their differences. Mr. McConnell wants to hold a vote before lawmakers return home for the Fourth of July recess. If the repeal bill is still looming over the Senate, Republicans are certain to face intense pressure from constituents who wish to see the Affordable Care Act remain in place.

The assessment being made by senators will be shaped in part by an analysis of the bill to be released by the Congressional Budget Office, the official scorekeeper on Capitol Hill.

The budget office found that the bill passed by the House last month would leave 23 million more people without insurance in a decade. Mr. Trump recently told senators that the House bill was “mean,” though weeks earlier he had celebrated its passage.

Under the Senate bill, the federal government would continue paying crucial subsidies to health insurance companies through 2019. Mr. Trump has threatened to halt payment of the subsidies, which reimburse insurers so they can reduce out-of-pocket costs for low-income people. Without this money, many insurers have said, they will sharply increase premiums or pull out of the marketplaces in many states.

The Senate bill would roll back the expansion of Medicaid under the Affordable Care Act, gradually reducing the extra money that states receive for newly eligible beneficiaries. The bill would also cap overall federal spending on Medicaid: States would receive a per-beneficiary allotment of money, but federal payments would grow more slowly than under the House bill, starting in 2025. Alternately, states could receive an annual lump sum of federal money in the form of a block grant.

State officials and health policy experts predict that many people would be dropped from Medicaid because states would not fill the fiscal hole left by the loss of federal money.

“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.

The Senate bill, like the House measure, would repeal taxes imposed on high-income people by the Affordable Care Act: an increase in their payroll taxes and a surtax on their net investment income.

The bill would delay a tax on high-cost employer-sponsored health insurance — the so-called Cadillac tax — to 2026. Under current law, it is scheduled to take effect in 2020. Employers and labor unions detest the tax and would have nearly a decade to try to kill it.

The Senate bill would provide $50 billion to help stabilize insurance markets and hold down premiums from 2018 through 2021. The money would be distributed by the federal government to insurance companies that apply. In addition, the bill would provide $62 billion in grants to states for similar purposes from 2019 to 2026.

The bill would generally prohibit consumers from using federal tax credits to help buy insurance that includes coverage for abortions. Democrats plan to challenge this provision as a violation of Senate rules being used to speed passage of the repeal bill.