Senate GOP releases ObamaCare repeal bill with deep cuts to Medicaid

by Peter Sullivan - 06/22/17 10:46 AM ET

Senate Republican leaders on Thursday released a draft of their long-awaited ObamaCare repeal-and-replace bill ahead of a high-stakes vote expected next week.

The measure includes deep cuts to Medicaid and fundamentally reshapes that program from an open-ended government commitment to a system of capped federal payments that limit federal spending.

The bill repeals billions of dollars in taxes that were used to raise money for ObamaCare’s coverage expansion and also abolishes the law’s mandates to buy coverage.

The tax credits under ObamaCare to help people buy private coverage would be kept but reshaped so that they are less generous and cost the government less money.

“It’s time to act because ObamaCare is a direct attack on the middle class and American families deserve better than it’s failing status quo,” Senate Majority Leader Mitch McConnell (R-Ky.) said Thursday. “They deserve better care. That’s just what we’re going to continue to work to bring them.”

Senate Democratic Leader Charles Schumer (N.Y.) countered by pointing to the bill’s tax cuts, much of which benefit high earners.

“This is a bill designed to strip away healthcare benefits and protections from Americans who need it most in order to give a tax break to the folks who need it least,” Schumer said.

The Republican measure phases out the federal funding for ObamaCare’s expansion of Medicaid, which has provided coverage for about 11 million people in 31 states. The funding will phase out over four years from 2020 to 2024, which is less than the seven-year phase-out pushed by more moderate Republicans.

The measure includes deeper cuts to Medicaid than the House bill, starting in 2025. Starting in that year, the cap on Medicaid payments would start growing at a slower rate, known as CPI-U, leading to deeper cuts over time.

It remains to be seen how centrist Republicans, like Sens. Rob Portman (R-Ohio) and Shelley Moore Capito (R-W.Va.), will react to the shorter timeframe for the Medicaid phase-out. Some, like Sen. Lisa Murkowski (R-Alaska), have indicated they might not want to phase out Medicaid expansion funding at all.

But those senators will be under intense pressure from leaders to back the bill and deliver a legislative victory to President Trump.

Sen. Dean Heller (R-Nev.), who is up for reelection next year and has been more protective of Medicaid than many other GOP senators, said he has reservations about the legislation.

“At first glance, I have serious concerns about the bill’s impact on the Nevadans who depend on Medicaid,” he said in a statement.

In a departure from the controversial MacArthur Amendment in the House bill, the Senate measure would not allow states to waive protections preventing people with pre-existing conditions from being charged more. But states could apply to waive ObamaCare rules on what health services an insurance plan must cover, known as essential health benefits.

That process would go through an existing waiver provision in ObamaCare, but the Senate bill would lower the standards a state must meet to get those waivers.

The draft bill keeps much of ObamaCare’s tax credit structure in place, a shift from the House bill, which created a new, less-generous tax credit system. The Senate bill, for example, will adjust the credits based on income, as ObamaCare does, so poorer people get more help than higher-income people.

Still, the Senate bill scales back the ObamaCare tax credits overall to provide less assistance to people in affording coverage.

The bill would change the “benchmark” health insurance plan used to calculate how much assistance each person gets to one that is less generous and has a higher deductible, while scaling back the assistance for people to pay premiums.

“Under the Senate bill, low-income people would pay higher premiums for bigger deductibles,” Larry Levitt, a healthcare expert at the Kaiser Family Foundation, wrote on Twitter.

The measure defunds Planned Parenthood for one year.

Democrats and many rank and file Republican lawmakers criticized GOP leaders for keeping the details of the bill secret until Thursday. The release gives lawmakers and the public only about a week to review the bill before the vote, which some Republican lawmakers have said might not be enough time.

– This story was updated at 1 p.m.

Tags Chuck Schumer Dean Heller Lisa Murkowski Mitch McConnell Rob Portman Shelley Moore Capito