Senate Republican leaders released a revised health care plan Thursday that would provide an added $70 billion to stabilize insurance exchanges over a decade in an effort to win over GOP holdouts.
The change comes on top of $112 billion provided for the same purpose in an earlier measure by Senate Majority Leader Mitch McConnell, who is hoping the modified bill will revive prospects for their embattled Obamacare repeal effort, which stalled about two weeks ago.
The new measure discards earlier plans to repeal three Obamacare taxes on the wealthy, according to the summary. That move effectively freed up about $230 billion in cash to bolster health expenditures.
The revised bill also includes a provision that would allow people for the first time to use health savings accounts to pay insurance premiums, according to the document.
It’s not clear whether the changes will gain enough backing to get through the Senate. More than half a dozen Republican and Democratic senators also have discussed alternatives to the GOP plan, which was developed without consulting Democrats.
Indeed, Republican Senators Lindsey Graham of South Carolina and Bill Cassidy of Louisiana on Thursday morning released their own alternative health plan that would shift much of current federal funding for Obamacare insurance and future funding directly to states, according to a statement from Graham’s office. Cassidy said he wants to offer his plan as an amendment to McConnell’s bill.
Because of the GOP’s narrow 52-48 majority, Republican leaders can lose no more than two votes in their party amid united Democratic opposition to efforts to repeal Obamacare. Republicans say that even if the GOP plan fails, they can’t leave the Affordable Care Act untouched because insurers are pulling out of some areas.
The changes include provisions intended to appeal to moderates worried about premium spikes predicted by the Congressional Budget Office and others under the previous bill.
But while the bill omits a series of tax cuts for the wealthy in a nod to moderates, conservatives get major changes legalizing far skimpier plans that aren’t part of the Obamacare exchanges.
Republican Senator Ron Johnson of Wisconsin, who had opposed plans to advance an earlier version of the bill in late June, said Thursday that he will support debating the current bill, although he isn’t ready to give his full backing.
It’s not immediately clear if the effort at finding a balance of more money to assuage moderates’ fears of higher premiums for poorer, older, sicker people will be enough to gain their support. Many have been skeptical or opposed to the idea of creating bare-bones plans that could siphon off healthy, young people and therefore cause premiums to rise in the exchanges.
The plan funnels billions of subsidies into those exchange plans to mitigate that effect.
But, overall, the bill still has far less money going into Medicaid and health subsidies than the Affordable Care Act. And senators have said they want to see a Congressional Budget Office estimate to determine how it impacts the insurance market and their states.
The revised draft would keep the earlier bill’s language allowing people earning up to 350 percent of the poverty level to receive subsidies. And it would keep a skimpier benchmark for subsidies than the Affordable Care Act’s silver plan, which would result in higher out-of-pocket expenses.
The new plan would also allow people to purchase a high-deductible catastrophic plan with federal tax credits, and include a provision prohibiting abortion coverage except in cases of rape or incest or to save the life of the mother in plans eligible for tax credits.
Covering the Sick
The revised bill includes a federal fund that would pay health insurers to cover costs of sicker people seeking individual coverage on the insurance exchanges.
To qualify for the funds, insurers would have to meet minimum coverage standards in the exchange, while also offering coverage off the exchange that meets state requirements. Those buying state-governed plans wouldn’t be allowed to use federal tax credits to buy their coverage but could tap tax-advantaged health savings accounts to cover the costs.
To appeal to lawmakers in high cost states like Alaska, 1 percent of expanded state innovation and stability grants would be reserved specifically to subsidize insurance in states where premiums are at least 75 percent higher than the national average.
Starting in 2022, states would have to share in the costs of those funds with their own money, with states having to shoulder 35 percent of the burden in 2026.
The bill changes the calculation for determining Medicaid payments to hospitals to assist with uncompensated care that is expected to more accurately allot the funds based on a state’s uninsured population instead of Medicaid enrollment as the original legislation did. Senator Marco Rubio, a Florida Republican, tweeted Wednesday that one of his priorities for changing the bill involved increasing those funds for hospitals in his state.
Republican leaders included a version of an amendment proposed by Republican Senator Ted Cruz of Texas and GOP Senator Mike Lee of Utah.
Cruz and Lee want to allow insurers to offer cheap, bare-bones plans alongside those that meet the more comprehensive coverage requirements of Obamacare. Critics in both parties say the proposal would essentially put people with pre-existing conditions in the Obamacare insurance pool and allow young, healthy people to buy cheaper plans in a separate pool.
But Lee wrote in a tweet Thursday morning that he hasn’t seen the new language of the amendment added to the bill and is “withholding judgment.”
Republican leaders asked the CBO to provide an analysis with, and without, the provision.
Cruz said Thursday he won’t vote to let the health bill advance unless his proposal, or something very similar, is sent to the full Senate.
“I think we’re making significant progress, and I look forward to attending the meeting,” Cruz said Thursday.
But health insurers have said the plan backed by Cruz would destabilize the insurance market and undermine protections for sick people. The BlueCross BlueShield Association called the Cruz plan “unworkable.”
America’s Health Insurance Plans, the industry’s main lobbying group, said his proposal would hurt the market by dividing healthy and sick people into separate groups. The sick people, AHIP said, would face extraordinarily high premiums, or might not be able to find coverage.
Without having seen McConnell’s latest plan, more than half a dozen Republican and Democratic senators have discussed alternatives — a bipartisan approach that would infuriate conservatives and probably would be a hard sell in the House, where lawmakers in May passed their own plan to gut Obamacare.
After the bill is released and scoured by the Congressional Budget Office, it will become clearer whether Republican leaders have found a balance between moderates’ desire for more spending for Medicaid and subsidies for Obamacare’s insurance exchanges, and conservatives seeking a smaller government role in health care.
“There’s a lot of different viewpoints, a lot of different feelings about it and they all have to be taken into consideration if you want to put together enough votes to pass the doggone thing,” said Senate Finance Chairman Orrin Hatch, a Utah Republican.
‘Like the Old Bill’
GOP Senator Rand Paul of Kentucky, a Tea Party stalwart, said Wednesday he will oppose the new measure and vote to block it from floor consideration — without having seen the legislation. That means Republicans can lose support from only one more of their members.
“The new bill looks a lot like the old bill except it spends more money, taxes more and does little to assuage the concerns of conservatives,” Paul told reporters. “At this point, I cannot support the bill.”
As part of a drive to lure other support with more health funding, Republican leaders chose to retain several Obamacare tax increases, a reversal from the earlier measure. That includes Obamacare’s 3.8 percent tax on net investment income for people who earn more than $200,000 and couples with incomes over $250,000, as well as a 0.9 percent Medicare surtax on the same incomes.
The plan also scraps a tax break for health-insurance executives’ pay, keeping an Obamacare provision allowing health insurance companies to deduct from their taxes $500,000 of the pay of each top official. That’s a tougher restriction than the limit imposed on other companies, which is $1 million per executive.
Those changes are designed to address concerns of moderates, including Bob Corker of Tennessee and Susan Collins of Maine, after Democrats and other critics said the earlier version cut taxes for the wealthy at the expense of low-income and sick people. The three tax items produce a revenue stream of nearly $232 billion over a decade.