Senate Health-Care Draft Repeals Obamacare Taxes, Provides Bigger Subsidies for Low-Income Americans than House Bill
Senate leaders on Wednesday were putting the final touches on legislation that would reshape a big piece of the U.S. health-care system by dramatically rolling back Medicaid while providing a softer landing to Americans who stand to lose coverage gained under the Affordable Care Act.
A discussion draft circulating Wednesday afternoon among aides and lobbyists would roll back the ACA’s taxes, phase down its Medicaid expansion, rejigger its subsidies, give states wider latitude in opting out of its regulations and eliminate federal funding for Planned Parenthood.
The bill largely mirrors the House measure that narrowly passed last month but with some significant changes. While the House legislation pegged federal insurance subsidies to age, the Senate bill would link them to income as the ACA does. The Senate proposal cuts off Medicaid expansion more gradually than the House bill, but would enact deeper long-term cuts to the health-care program for low-income Americans. It also removes language restricting federally-subsidized health plans from covering abortions, which may have run afoul of complex budget rules.
Senate Majority Leader Mitch McConnell (R-Ky.) intends to present the draft to wary GOP senators at a meeting on Thursday morning. McConnell has vowed to hold a vote before senators go home for the July Fourth recess, but he is still seeking the 50 votes necessary to pass the major legislation under arcane budget rules. A handful of senators from conservatives to moderates are by no means persuaded that they can vote for the emerging measure.
Aides stress that the GOP plan is likely to undergo more changes in order to garner the 50 votes Republicans need to pass it. Moderate senators are concerned about cutting off coverage too fast for those who gained it under Obamacare, while conservatives don’t want to leave big parts of the ACA in place.
Moderates who are on the fence about whether to support the Obamacare overhaul are likely to be pleased at the bill’s approach to subsidies because they would be based on financial need, potentially preserving coverage for more people who got insured under the ACA.
Subsidies are currently available to Americans earning up to 400 percent of the federal poverty level. Starting in 2020, that threshold would be lowered to 350 percent under the Senate bill — but anyone below that line could get the subsidies if they’re not eligible for Medicaid.
Yet the Senate bill would go farther than the House version in its approach to cutting Medicaid spending. In 2025, the measure would tie federal spending on the program to an even slower growth index than the one used in the House bill. That move could prompt states to reduce the size of their Medicaid programs.
In a move that is likely to please conservatives, the draft also proposes repealing all of the ACA taxes except for its so-called “Cadillac tax” on high-cost health plans in language similar to the House version. Senators had previously toyed with the idea of keeping some of the ACA’s taxes.
The House had a difficult time passing its own measure after a roller-coaster attempt, with the first version being pulled before reaching the floor after House Speaker Paul D. Ryan (D-Wisc.) determined he did not have the votes. House Republicans went back to the drawing board and passed their own measure – which would more quickly kill Medicaid expansion and provide less-generous federal subsidies – on May 4.
Even if the Senate measure does pass the upper chamber, it will still have to pass muster with the more conservative House before any legislation could be enacted.