What’s in the GOP Senate Health Care Bill?

What’s in the GOP Senate Health Care Bill?

Thursday, Senate Republicans finally unveiled their version of the American Health Care Act (AHCA). It’s almost as much of a stinker as its House counterpart.

If you were hoping the GOP would make good on their promise to repeal and replace Obamacare, then I have some disappointing news: the latest Republican health insurance brainchild does neither.

As we discussed when dissecting the unimpressive House AHCA, the Senate GOP bill is also limited in what it can accomplish for one reason — reconciliation. Senate Republicans are relying on the budget reconciliation mechanism to pass their first health care overhaul with a simple majority vote.

What’s in the bill?

Take Obamacare, pour it in a pitcher, dilute generously and you’ve got the Senate’s GOP health care bill. Consensus here (at least on the right) is that the latest “repeal” bill is Obamacare-lite, wholly unsatisfying.

Indidvidual mandate stays, sort of

Granted, the penalty would be reduced to $0. Many are reporting this as elimination. As far as we’re concerned, so long as the language remains, the opportunity for the mandate to be reinstated does too.

Tax Credits

Different from the House bill, the Senate bill moves tax credits from age-based to income-based.

From WaEx:

First, its proposed tax credits would vary with income and subsidize coverage for people making up to 3.5 times the poverty level, or about $86,000 for a family of four starting in 2020.

This scheme is virtually no different than Obamacare’s, which provided tax credits to people making up to four times the poverty level — about $98,000 for a family of four.

The House’s American Health Care Act offered tax credits that vary by age— a suitable proxy for how much it actually costs to insure someone. That’s a far better approach — one that could actually help control health costs.

Medicaid Expansion will be phased out…eventually…if we have a President and Congress who chooses not to reverse the policy in 2020 and 2024

Just keep kicking the can down the never-ending road to insolvency.

Back to WaEx:

The Senate bill preserves Obamacare’s expansion of Medicaid to those making up to 138 percent of the poverty level for at least three more years — and potentially more than that. Starting in 2021, it would pare back federal funding for this group. And in 2025, the bill would ratchet down the growth rate for Medicaid spending to the rate of inflation.

Of course, those cuts may never take effect. Republicans will need to keep the White House in 2020 to ensure the Medicaid expansion ends. And they’ll need to ensure that they win in 2024 in order to enact their reforms to the program’s growth rate.

Moderate Republicans in both the Senate and in governor’s mansions across the country are already unenthused about any cuts to Medicaid. Delaying these reforms is not that far from doing nothing at all.

Planned Parenthood funding

The Senate Bill issues a one year Medicaid suspension for America’s premier abortion provider. Further, the bill disallows the small employer health insurance expense credit for plans that include vanity abortion coverage (with exclusions to life of the mother, rape, and incest).

General framework

Reason‘s Peter Suderman has the best analysis here:

To understand the Senate plan, it helps to recall Obamacare’s underlying framework. The centerpiece of the law was a reform of the individual market, intended to give those who do not get coverage through work or a federal program access to subsidized, regulated coverage. The law created a new federal subsidy, based on income, for lower- and middle-income households to purchase health insurance. It set up federal rules requiring insurers to sell to all comers while limiting their ability to charge based on health history. It mandated that all individuals obtain health coverage or pay a tax penalty. And it erected a system of government-run health insurance exchanges on which consumers could purchase subsidized, regulated individual market coverage.

Those exchanges have never been fully stable as either business or policy propositions. Premiums have marched steadily upwards; last year, the price of a typical plan rose by 22 percent, and early reports show large spikes coming this year as well. The non-profit health insurance organizations that Obamacare funded have mostly shut down. Large, for-profit health insurers, meanwhile, have lost money and either scaled back their participation or dropped out entirely.

…

The way it does this is by authorizing additional payments known as cost-sharing reduction (CSR) subsidies to insurers through 2019. It also authorizes the back payment of any CSR subsidies that insurers have not recieved. On this front, it is actually an expansion of Obamacare, and it is a revealing sign of the shallowness of Republican thinking on health care policy.

The Obama administration initially requested congressional authorization to make the CSR payments, which are called for in Obamacare, but not explicitly appropriated. The House did not provide it. The administration then paid them anyway, believing that the exchanges would collapse without them. In response, House Republicans sued, arguing that only Congress has the power to appropriate funds. A federal judge agreed that the Obama administration was violating the constitutional separation of powers. The Trump administration has continued making the payments while threatening to withhold them, adding to the uncertainty for insurers operating in the exchanges.

Now Senate Republicans are proposing to explicitly authorize those payments for the first time. That means they are proposing to explicitly authorize and continue the very policy their House colleagues took the previous administration to court for pursuing. It amounts to an expansion of Obamacare, and while it may reduce uncertainty in some markets, it is unlikely to halt premium increases or fully stabilize the exchanges, which were degrading even before Trump threatened to withhold the payments.

There’s little reason to believe we’ll ever be rid of Obamacare

Again, this is only an initial effort designed to make it over the reconciliation hurdle, but as Suderman points out, Republicans seem incapable of thinking beyond the existing Obamacare framework to better free-market solutions.

Four Conservative Senators Will Not Vote for Bill in its Current Version

With little substantive change to the pillars of Obamacare, it’s not entirely surprising the conservative Senate contingent is unhappy.

Sens. Ted Cruz, Ron Johnson, Mike Lee, and Rand Paul said Thursday they’re unwilling to suppor the bill in its current form.

From Sen. Cruz:

“While I have not yet had the opportunity to fully review the draft legislative text itself, there are components that give me encouragement and there are also components that are a cause for deep concern.

“I am encouraged that the bill would expand association health plans, so those in individual or small group markets can join together in large groups to get lower rates. I am also pleased that the bill would make at least some progress in reining in the long-term growth of Medicaid. These are two inclusions that I have been fighting for since the beginning of our discussions. Finally, I am glad that this retains the provisions previously passed by Congress to prevent taxpayer dollars from funding organizations that perform abortions.

“However, as currently drafted, this bill draft does not do nearly enough to lower premiums. That should be the central issue for Republicans – repealing Obamacare and making healthcare more affordable. Because of this, I cannot support it as currently drafted, and I do not believe it has the votes to pass the Senate.

“But it is important to remember that what was released today was only a draft. I am hopeful that as we openly debate this legislation, real improvements will be made prior to floor consideration so that we can pass a bill that provides the relief from Obamacare that Republicans have repeatedly promised the last seven years.

“Specifically, we should do more to ensure consumers have the freedom to choose among more affordable plans that are tailored for their individual healthcare needs. We should allow consumers to purchase insurance across state lines and create a true 50-state marketplace, driving down costs for everyone. We should expand health savings accounts so that consumers can pay health insurance premiums on a pre-tax basis. We should incentivize states to cap punitive damages in medical malpractice lawsuits to further reduce the cost of healthcare.

“Finally, we should provide real flexibility for Medicaid, so states can design creative and innovative ways to provide care for our most vulnerable. I have strongly advocated for these proposals to this point and will continue to do so going forward.

Cruz concluded by saying he hopes the Senate can negotiate to a “yes”.

From Sen. Paul, who takes particular issue with the subsidies to insurance companies, but appreciates the bill’s allowance of cross-state co-ops:

.@RandPaul explains why he is opposing the Senate healthcare bill #CAVUTO @FoxNews https://t.co/WyDKhGi4CE

— Neil Cavuto (@TeamCavuto) June 22, 2017

Paul noted this bill is not President Trump’s bill or what he campaigned on.

Full text of bill here:

Senate GOP Health Care Bill by Legal Insurrection on Scribd

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