Senate GOP unveils ‘Obamacare’ overhaul, but not all aboard

WASHINGTON (AP) — Senate Republicans launched their plan for shriveling Barack Obama’s health care law Thursday, edging a step closer to their dream of repeal with a bill that would slice and reshape Medicaid for the poor, relax rules on insurers and end tax increases on higher earners that have helped finance expanded coverage for millions.

Four conservative GOP senators quickly announced initial opposition to the measure and others were evasive, raising the specter of a jarring rejection by the Republican-controlled body. But Senate Majority Leader Mitch McConnell, R-Ky., indicated he was open to discussion and seemed determined to muscle the measure through his chamber next week.

Sen. Jeff Merkley, D-Ore., third from left, accompanied by Sen. Debbie Stabenow, D-Mich., second from left, Sen. Maggie Hassan, D-N.H., right, and healthcare leaders, discuss the effects of the proposed Republican healthcare legislation on families at a news conference on Capitol Hill in Washington, Thursday, June 22, 2017. (AP Photo/Andrew Harnik)

Release of the 142-page proposal ended the long wait for one of the most closely guarded bills in years. McConnell stitched it together behind closed doors, potentially moving President Donald Trump and the GOP toward achieving perhaps their fondest goal — repealing former President Obama’s 2010 statute, his proudest domestic legacy.

At the White House, Trump spoke of a bill “with heart.” On Facebook, Obama said at the heart of the bill was “fundamental meanness.”

The bill would end Obama’s tax penalties on people who don’t buy insurance — effectively ending the so-called individual mandate — and on larger companies that don’t offer coverage to their workers. It would offer less generous subsidies for people than Obama’s law but provide billions to states and insurance companies to buttress markets that in some areas have been abandoned by insurers.

McConnell must navigate a narrow route in which defections by just three of the 52 Republican senators would doom the legislation. He and others said the measure would make health insurance more affordable and eliminate Obama coverage requirements that some people find onerous.

“We have to act,” McConnell said. “Because Obamacare is a direct attack on the middle class, and American families deserve better than its failing status quo.”

Senate Majority Leader Mitch McConnell, R-Ky., joined by, from left, Sen. John Barrasso, R-Wyo., Sen. John Thune, R-S.D., and Majority Whip John Cornyn, R-Texas, speaks following a closed-door strategy session, at the Capitol in Washington, Tuesday, June 20, 2017. Sen. McConnell says Republicans will have a “discussion draft” of a GOP-only bill scuttling former President Barack Obama’s health care law by Thursday. (AP Photo/J. Scott Applewhite)

Democrats said the measure would result in skimpier policies and higher out-of-pocket costs for many and erode gains made under Obama that saw roughly 20 million additional Americans gain coverage.

“We live in the wealthiest country on earth. Surely we can do better than what the Republican health care bill promises,” said Senate Minority Leader Chuck Schumer, D-N.Y.

Four conservative senators expressed opposition but openness to talks: Ted Cruz of Texas, Kentucky’s Rand Paul, Mike Lee of Utah and Ron Johnson from Wisconsin. They said the measure falls short, missing “the most important promise that we made to Americans: to repeal Obamacare and lower their health care costs.”

On the other hand, Sens. Dean Heller of Nevada, facing a competitive 2018 re-election battle, Ohio’s Rob Portman and Shelley Moore Capito of West Virginia expressed concerns about the bill’s cuts to Medicaid and drug addiction efforts. And Susan Collins of Maine reiterated her opposition to language blocking federal money for Planned Parenthood, which many Republicans oppose because it provides abortions.

At the White House, Trump called Democrats “obstructionists” for opposing the measure and added, “We’ll hopefully get something done and it will be something with heart and very meaningful.”

Obama was more than skeptical.

“If there’s a chance you might get sick, get old or start a family, this bill will do you harm,” he wrote. He said “small tweaks” during the upcoming debate “cannot change the fundamental meanness at the core of this legislation.”

American Nurses Association President Pamela Cipriano holds up a list of essential health benefits as she discusses the effects of the proposed Republican healthcare legislation on families at a news conference with Democratic senators on Capitol Hill in Washington, Thursday, June 22, 2017. (AP Photo/Andrew Harnik)

The House approved its version of the bill last month. Though Trump lauded its passage in a Rose Garden ceremony, he called the House measure “mean” last week.

The nonpartisan Congressional Budget Office said under the House bill, 23 million fewer people would have coverage by 2026. The budget office analysis of the Senate measure is expected early next week.

The Senate legislation drew support from the U.S. Chamber of Commerce, which said it would “stabilize crumbling insurance markets” and curb premium increases. But medical groups announced opposition, saying it would diminish coverage. They include the American Hospital Association and the American Academy of Pediatrics.

The Senate bill would phase out extra money Obama’s law provides to 31 states that agreed to expand coverage under the federal-state Medicaid program. Those additional funds would continue through 2020, then gradually fall and disappear entirely in 2024.

Ending Obama’s expansion has caused major rifts among GOP senators. Some from states that have expanded have battled to delay the phase-out, while conservative Republicans have sought to halt the funds quickly.

Beginning in 2020, the Senate measure would also limit the federal funds states get each year for Medicaid. The program currently gives states all the money needed to cover eligible recipients and procedures.

The Senate bill largely uses people’s incomes as the yardstick for helping those without workplace coverage to buy private insurance. That would focus the aid more on people with lower incomes than the House legislation, which bases its subsidies on age.

People are removed from a sit-in outside of Senate Majority Leader Mitch McConnell’s office as they protest proposed cuts to Medicaid, Thursday, June 22, 2017 on Capitol Hill in Washington. (AP Photo/Jacquelyn Martin)

Caroline Pearson, a senior vice president of the consulting firm Avalare Health, said the Senate subsidies would be smaller than Obama’s because they’re keyed to the cost of a bare-bones plan and because additional help now provided for deductibles and copayments would eventually be discontinued.

The bill would let states get waivers to ignore some coverage requirements under Obama’s law, such as specific health services insurers must now cover.

States could not get exemptions to Obama’s prohibition against charging higher premiums for some people with pre-existing medical conditions, but the subsidies would be lower, making coverage less affordable, Pearson said. States would also have to retain Obama’s requirement that family insurance cover children up to age 26.

Tax boosts Obama levied on upper income people and medical industry companies would be repealed, and another on costly employer-provided health insurance would be delayed.

The bill would bar using tax credits to buy coverage that includes abortions. That language could be forced out of the bill for procedural reasons, which would threaten support from conservatives, but Republicans would seek other ways to retain the restriction.

For the next two years, the Senate would also provide money that insurers use to help lower out-of-pocket costs for millions of lower income people. Trump has been threatening to discontinue those payments, and some insurance companies have cited uncertainty as a reason they are abandoning some markets and boosting premiums.

Here’s how the Senate bill compares to the House bill and to the Affordable Care Act that Democrat Barack Obama signed into law seven years ago:

MEDICAID

Obama law: States have the option to expand Medicaid to cover more low-income adults. Feds pick up a generous share of the cost, no less than 90 percent. Medicaid covers some 70 million people, from newborns to elderly nursing home residents.

House GOP bill: Reduces the generous federal match for expanded Medicaid to the same rate states get for other beneficiaries, starting in 2020. (The basic Medicaid match rate now averages 57 percent nationally.)

More significantly, ends Medicaid’s longtime status as an open-ended entitlement, with Washington paying a share of what each state spends. Places a per-person limit on future federal contributions, starting in 2020.

Senate GOP bill: Stretches phase-out of Medicaid expansion financing. Higher payments would be provided through 2023. Exempts spending on special-needs children from cap on federal Medicaid matching contribution. Uses a less generous inflation adjustment than House bill.

PRE-EXISTING CONDITIONS

Obama law: People cannot be denied coverage because of pre-existing medical problems, nor can they be charged more because of poor health.

House GOP bill: To be protected, consumers must avoid a break in coverage of more than 63 days. Those who let their coverage lapse pay a 30 percent premium penalty for a year. States can seek waivers that would allow insurers to charge higher premiums based on health status under certain circumstances.

Senate GOP bill: Similar requirement to avoid a break in coverage, but penalty is a six-month wait for policy to take effect. States cannot seek waivers that would allow insurers to charge more based on health.

SUBSIDIES FOR PRIVATE INSURANCE

Obama law: Provides two kinds of subsidies for people who don’t have access to coverage on the job. Income-based subsidies help with premiums and with out-of-pocket costs such as deductibles and copayments. Premium subsidies keyed to the cost of a midlevel “silver” plan.

House GOP bill: Premium subsidies are keyed to age, not income. Ends cost-sharing subsidies in 2020, while failing to clear up uncertainty about whether they can be paid currently.

Senate GOP bill: Premium subsidies are keyed to income, age and geography, and are more tightly focused on lower-income people. But the benchmark for subsidies would be a bare-bones “bronze” plan. Cost-sharing subsidies are explicitly extended through 2019, an important detail that should help calm insurance markets.

AGE FACTOR

Obama law: Insurers cannot charge their oldest customers more than 3 times what they charge young adults.

House GOP bill: Loosens the age restriction so insurers can charge older adults up to 5 times more.

Senate GOP bill: Generally follows House standard.

MANDATES TO CARRY HEALTH INSURANCE

Obama law: Requires those deemed able to afford coverage to have a policy or risk fines from the IRS. Requires larger employers to offer coverage to full-time workers.

House GOP bill: Repeals coverage mandates immediately.

Senate GOP bill: Same as House.

STANDARD HEALTH BENEFITS

Obama law: Requires all insurance plans to cover services from 10 broad “essential services,” including hospitalization, office visits, prescriptions, maternity and childbirth, substance abuse treatment, rehabilitation, and preventive services, including birth control at no additional charge for women.

House GOP bill: Allows states to seek waivers from the benefits requirement.

Senate GOP bill: Also provides a pathway for states to seek benefit waivers.

OPIOID EPIDEMIC

Obama law: Medicaid expansion has enabled many states to provide comprehensive treatment to people caught in the opioid epidemic.

House GOP bill: No additional money for the opioid epidemic.

Senate GOP bill: Creates $2 billion fund to provide grants to states for substance abuse and mental health treatment. Ohio Republican Sen. Rob Portman had sought $45 billion over 10 years.

TAXES

Obama law: Raised taxes on upper-income people and health care companies to finance coverage expansion.

House GOP bill: Cuts taxes by nearly $1 trillion over the next decade, mostly for corporations and the richest families.

Senate GOP bill: Tax cuts very similar to House bill, though some would be delayed.

ABORTION

Obama law: Private health insurance plans sold to people who receive federal subsidies can cover abortion. However, they must collect a separate premium, strictly segregated from taxpayer funds.

House GOP bill: Forbids abortion coverage by private plans sold to people who receive taxpayer subsidies. Defunds Planned Parenthood.

Senate GOP bill: Forbids abortion coverage by plans sold to people who receive taxpayer subsidies. Defunds Planned Parenthood.

However, under Senate rules, there’s a chance abortion restrictions on private insurance plans may be struck down. In that case, Senate leaders plan a workaround. Billions of dollars to stabilize state health insurance markets would be funneled through the Children’s Health Insurance Program, which already has strong limitations on abortion funding. The idea is that insurers needing access to the stability fund would essentially have to drop coverage for abortions.

 

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