From the start, Senate Republicans have made one thing clear: Their Obamacare-repeal bill would be different from the House measure. At the same time, President Trump has declared he wants legislation with “heart” that’s less “mean” than the House version.
So does the newly unveiled Senate bill achieve either goal? It depends on which part of the bill you look at.
The Senate legislation still aims to narrow the Affordable Care Act’s tax credits (even if they are more generous than in the House bill), provide substantial tax cuts for the wealthy, and eventually end the Medicaid expansion while proposing even deeper cuts on the overall program than the House legislation.
“Like the House bill, the Senate bill is primarily an instrument to cut taxes massively for wealthy individuals and corporations while imposing massive Medicaid cuts,” said Timothy Jost, a professor at Washington and Lee University School of Law. Although Jost said the private-insurance sections were strikingly different, he would not describe them as “less mean.”
“I suspect that fewer people will lose coverage but that their coverage will impose such high cost-sharing as to be useless for many,” he said.
In a statement, Sen. Lamar Alexander praised the bill and touted protections for preexisting conditions. “To begin with, the draft Senate health care bill makes no change in the law protecting people with pre-existing conditions, no change in Medicare benefits, and increases Medicaid funding—that’s TennCare—at the rate of inflation,” the Tennessee Republican said.
As for whether Trump thinks the new Senate bill is “mean,” White House spokeswoman Sarah Huckabee Sanders didn’t give a clear answer when asked by reporters Thursday.
“I haven’t had that conversation, but I do know that he made a statement earlier that said this is a negotiation, and so he’s going to continue that process with both House and Senate members and his administration until we get the best bill that we can, and that will be the one that he signs,” Sanders said.
Here are some of the key elements of Senate leadership’s repeal and replace of Obamacare:
On one of the biggest sticking points for senators—Medicaid—the draft bill appears to be trying to appease some moderates while giving a win to the conservatives.
The proposal would provide a three-year glide path when phasing out the Medicaid expansion starting after 2020. By 2024, levels of funding would be restored to pre-ACA levels. Sen. Rob Portman had wanted a phase-out, although he has been pressing for a seven-year process.
At the same time, the Senate bill proposes even deeper cuts to the Medicaid program than were included in the House legislation. The growth rate for the per-capita cap on spending starting in 2025 would be set at the general inflation rate, which is something that Sen. Pat Toomey had been advocating. This is a slower growth rate than what was included in the House bill.
But Sen. Susan Collins immediately said this provision was a concern for her. “That translates into literally billions of dollars, and it would result in states cutting back eligibility or rural hospitals going under because of uncompensated care, and those are serious problems,” she said.
The American Academy of Pediatrics also called out this part of the Senate bill. “The bill includes misleading ‘protections’ for children by proposing to exempt them from certain Medicaid cuts,” the group said in a statement. “A ‘carve-out’ for children with ‘medically complex’ health issues does little to protect their coverage when the base program providing the coverage is stripped of its funding.”
After attending a caucus briefing on the language, Sen. Bill Cassidy told reporters he does think the legislation is less “mean,” pointing to changes in the tax credits. Unlike in the House bill, which proposed a flat tax based on age, the Senate proposes to have tax credits based on age, income, and geography, making them more generous.
However, they will still be narrower than the Affordable Care Act’s tax credits. Under current law, people between 100 to 400 percent of the poverty level are eligible for the credits, but the Senate proposal would lower that to 350 percent. The draft bill would also lower the actuarial value for the benchmark plan, which would likely lower the dollar value of the premium tax credits.
Cassidy did say he would have to evaluate the generosity of the tax credits to determine whether, as the Medicaid expansion is scaled back, lower-income people will no longer be able to afford insurance.
The draft text released Thursday includes a short-term stabilization fund to provide $50 billion towards reinsurance in the first four years. For 2018 and 2019, $15 billion would be provided, and then $10 billion would be provided for the subsequent two years.
The legislation would also commit to funding the cost-sharing-reduction payments through 2019. Insurance companies have said these payments are vital to the stability of the marketplace.
Waivers and state flexibility
Instead of taking up the structure in the House bill—which had also allowed sicker patients to be charged more if they have a lapse in coverage—the Senate is looking to streamline the process for waivers that already exist under the ACA.
Senior GOP Senate staff said Thursday that states would be able to use these tools, known as 1332 waivers, to make changes to the essential health benefits that policies are required to cover.
But Jost said that states would not be able to waive community rating requirements, as would be allowed under the structure of the House bill in limited circumstances. Under the AHCA, states could opt to allow people with preexisting conditions to be charged more if they had a lapse in coverage.