Policy

New GOP Health Care Draft Keeps Major Medicaid Changes

Includes a few small revisions in an effort to bring on hesitant lawmakers

Senate Republican leadership on Thursday released updated language for their legislation to repeal and replace large portions of the 2010 health care law. (Bill Clark/CQ Roll Call File Photo)

Updated 3:43 p.m. | The updated Senate Republican health care bill to overhaul the U.S. health insurance system makes a number of tweaks designed to win the support of GOP holdouts, but maintains the significant changes to the Medicaid program that continues to be the foundation of the entire legislation.

An analysis of the new draft unveiled Thursday — which would pour billions more into a state fund intended to help lower premiums — from the nonpartisan Congressional Budget Office is expected to be released Monday, with a procedural vote on the measure occurring early next week.

A number of members expressed hesitation over the previous draft, and some have already even come out against the changes included in Thursday’s version.

It remains to be seen whether the revisions will be enough to win over the support of GOP lawmakers such as Sens. Lisa Murkowski of Alaska, Dean Heller of Nevada and Shelley Moore Capito of West Virginia, who are concerned about the cuts to Medicaid.

“I’m hopeful,” Senate Republican Conference Chairman John Thune of South Dakota said when asked whether leadership has the votes to pass the motion to proceed. 

Senate Majority Leader Mitch McConnell has urged his colleagues to vote to begin debate on the bill, citing the opportunity for virtually endless amendments during the so-called vote-a-rama that must take place under the fast-track budget procedure known as reconciliation that the GOP is using to advance the legislation.

One noticeable addition is the inclusion of a tweaked version of an amendment from Sens. Mike Lee of Utah and Ted Cruz of Texas. 

The language included in Thursday's draft is different from the version pushed by the conservative senators, Lee said, and would allow insurers to offer plans exempt from only select requirements — such as the mandate that certain health conditions be covered and the measure that prohibits insurers from charging individuals with pre-existing conditions more for coverage — included in the 2010 health care law.

It would also include additional funding to help insurers cover high-risk individuals, but that money would only be accessible if the insurers offer a plan that is compliant with the mandates in the health care law.

It remains to be seen whether the altered language would appease conservative holdouts. Both Lee and Cruz had hinged their support for the overall measure on the addition of that provision.

The measure could face criticism from moderate lawmakers who are worried the proposal would lead to higher health care costs for sicker individuals, something the insurance industry has already warned could happen

The provision could be dropped or altered before the bill reaches the floor, Thune said.

“How the CBO reacts to that, the kind of feedback they give us, will probably have a lot to do with what ultimately makes it into the final package,” he told reporters Thursday morning. “They are trying to find a way to make [Cruz’s] approach workable within the context of the other broader insurance [changes].” 

The updated language would still phase out the current law’s Medicaid expansion by 2024, impose a stricter growth rate on the Medicaid program in 2025, and transition it from an open-ended funding stream to amounts based on the state’s population. The CBO previously said those measures would result in a $772 billion reduction in federal spending on the entitlement program over the next ten years.

The Medicaid cuts appear to have cost the support of moderate Maine Sen. Susan Collins, who said on Twitter after the draft’s release that she would vote against the motion to proceed with updated legislation.

Unlike previous drafts, the new language would also maintain the cap on the tax deduction for health insurance executive salaries, as well as a 3.8 percent investment tax and a 0.9 percent payroll tax on high earners, included in the 2010 health care law. This undercuts a major Democratic talking point, that Republicans were pursuing tax cuts for the rich while raising health care costs for the poor.

Among the other major changes:

  • The addition of $70 billion in the stability fund designed to help states lower premiums (the original draft included a $112 billion fund) and $45 billion to help states treat those suffering from opioid addiction.
  • Federal funding for some rural hospitals will now be tied to the state’s uninsured rate. A prior draft had the funding pegged to Medicaid enrollees.
  • States would be able to bypass the new Medicaid caps in the event of a public emergency, like last year’s Zika virus outbreak. This was a key demand of some members including Florida Sen. Marco Rubio.
  • Enrollees on the individual market would now be able to pay their monthly premiums using a health savings account, a provision pushed by conservative members of the caucus such as Sen. Rand Paul of Kentucky.
  • Individuals would now be able to use tax credits on what are known as “catastrophic plans,” or insurance plans with high deductibles and low monthly payments. Under the current law, this was not allowed.
  • States that expanded Medicaid under the 2010 health care law would be allowed to apply for more funding should they choose to operate under a block grant system, an option provided under the original GOP proposal.

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