GOP tensions rise over Cruz proposal

Tensions between Senate Majority Leader Mitch McConnell (R-Ky.) and his old antagonist, Sen. Ted Cruz (R-Texas), have reappeared in the high-stakes negotiation over healthcare reform.

Cruz is insisting on a reform to the Senate GOP bill that senior GOP aides say is a nonstarter with much — if not most — of the Republican conference.

While Cruz sought out Health Committee Chairman Lamar Alexander (R-Tenn.) to play what he promised would be a constructive role in the debate, senior GOP aides say Cruz is no longer being agreeable.

{mosads}Instead, he is again being a thorn in McConnell’s side, much like he was in 2013, when he insisted on blocking a government spending bill unless it included language halting the implementation of ObamaCare, the staffers argue. Two years ago, Cruz famously called McConnell a liar on the Senate floor amid a debate on the Export-Import Bank.

GOP aides say the proposal that Cruz and his allies are framing as the potential key to passing the stalled healthcare bill is a nonstarter with most Republicans in the upper chamber.

The proposal would allow insurance companies the freedom to sell any kinds of health plans they want as long as they also sell at least one plan that qualifies under the regulatory requirements of the Affordable Care Act (ACA).

“I would say that if we voted on the Cruz proposal, it would be in the neighborhood of 37 to 15 against, 37 no votes and 15 yeses, and that’s probably generous,” said a GOP aide familiar with the Senate negotiations.

“Nobody wants to go home and say to a 45-year-old steelworker with diabetes that you should have to pay a lot more for your health insurance,” the aide added.

Frustrations are mounting with Cruz among Senate negotiators because leaders have felt blindsided by his demand that the legislation essentially eliminate the protection for people with pre-existing conditions.

When McConnell told GOP colleagues at a presentation this spring that the bill would not touch pre-existing conditions, Cruz did not specifically object.

“What he would say is we need to go after all insurance rules, as many as we can,” said a Republican source familiar with the meeting.

A conservative Republican aide acknowledged that Sen. Mike Lee (R-Utah) was more outspoken in his objection to the refusal by leaders to touch pre-existing conditions, while Cruz’s position was left murky.

GOP leaders thought Cruz would be on board if the legislation tackled other regulations, such as rules for what services insurers must provide as essential health benefits, which the public Senate bill addresses. Cruz’s insistence, according to GOP aides, in recent weeks that the Senate bill scrap the regulations governing pre-existing conditions is a shift that has made their job more difficult.  

These claims are getting strong pushback from Cruz defenders.

Aides siding with the Texas Republican say he made it clear to leaders from the start that the Senate bill should give people the freedom to buy cheaper health plans that are exempt from federal regulation.

“From day one of the Senate discussions, in a working group that Sen. Cruz started with Chairman Alexander, consumer freedom has been one of Cruz’s major points. The idea that this is sprouting at the last minute is inaccurate,” said a senior conservative Republican aide.

The Hill reported Monday that Senate GOP leaders have sent two versions of a revised healthcare bill to the Congressional Budget Office (CBO), one with the Cruz amendment and one without it.

Republican aides who say Cruz’s amendment is politically untenable acknowledge that the CBO could report some good news, like that the proposal would send down premiums without significantly affecting coverage.

But they think it’s more likely that the CBO analysis will be damning.

“Or CBO will come back and say the market will be destroyed and 45 million people will be left without insurance,” said one staffer.  

Conservatives close to Cruz admit the CBO score will be better for the revised bill that does not include Cruz’s amendment because that version includes a market stabilization fund without including any of the regulatory reforms that would destabilize — at least temporarily — the market.

“It’s getting all the money without needing the money,” said one source familiar with the talks who is sympathetic to Cruz’s proposal.

Various policy experts are siding with McConnell in the debate.

American Action Forum, a nonpartisan, nonprofit policy research group led by former CBO Director Douglas Holtz-Eakin, warned that a proposal like Cruz’s would send premiums soaring for people who are older and sicker than the general population.

It would have the effect of gutting ObamaCare’s popular requirement that insurance companies sell affordable plans to people regardless of pre-existing medical conditions, the group warned.

“If one modified the statute and treated the setting of premiums by pricing two separate risk pools (or if it was determined that these are in fact different plans and can be priced differently), premiums for [qualified healthcare plans] would skyrocket,” Tara O’Neill Hayes, the deputy director of healthcare policy at American Action Forum, wrote in a June 29 analysis.

Other experts agree.

“It sounds like a recipe for segmenting the market in a way that would destabilize it. You would end up back in the scary dysfunctional world we were in before the ACA where healthy people could get coverage although that coverage might not protect them if they got sick and sick people would have to pay an unaffordable amount for coverage,” said Jason Levitis, a senior fellow at the Solomon Center for Health Law and Policy at Yale Law School.

“The coverage that sick people need would still have to be offered but offered at any price, so probably unaffordable,” he added.

Levitis led the implementation of the law at the Treasury Department under President Obama.

This makes Cruz’s proposed reform, which is backed by other conservatives such as Lee, dead on arrival with the Republican caucus, senior Senate GOP aides warn.

One aide said that while a “room full of actuaries” would favor getting rid of regulations protecting pre-existing conditions, “the political real-world consequences are too devastating to take on and not of the interests of people we are trying to help.”

More than three-quarters of voters across the nation, 77 percent, say it is “very important” that people with pre-existing conditions pay the same price for health insurance as others, according to a USA Today/Suffolk University survey of 1,000 voters conducted from June 24 to June 27.

Many Republican senators have either called for protecting people with pre-existing conditions or praised the Senate bill unveiled on June 22 for keeping the current protection intact.

“The draft healthcare legislation preserves access to care for people with pre-existing conditions, strengthens Medicaid and does not change Medicare, gives people more health insurance choices, and allows people to stay on their family health insurance plan until they are 26,” Sen. Roy Blunt (R-Mo.), a member of McConnell’s leadership team, said in a statement the day the bill was made public.

Sen. Richard Burr (R-N.C.), another McConnell ally, emphasized in a statement, “The Senate bill keeps current-law protections for individuals with pre-existing conditions, prohibiting the denial of health insurance coverage for this reason.”

Cruz disputes claims that his proposal would destroy protections for people with pre-existing conditions.

He said that even if healthy people were to flock to plans free of federal regulations, sick people would still receive government subsidies to help them afford insurance coverage.

“You would likely see some market segmentation,” Cruz told Vox last week. “But the exchanges have very significant federal subsidies, whether under the tax credits or under the stabilization funds.”

He and his allies show no signs of backing down.

“If they don’t want to include that amendment, they can get to 50 elsewhere,” said a conservative Senate Republican aide.

They are backed up by conservative groups such as FreedomWorks and the Club for Growth, which panned the legislation made public last month.

Club for Growth on Wednesday praised the Cruz-Lee proposal as a “significant step in the right direction.”

“At a bare minimum, Congress should not stand in the way of allowing Americans who want to opt out of ObamaCare to do so,” said Club for Growth President David McIntosh.

Cruz and Lee also have the support of members of the conservative House Freedom Caucus, such as Rep. Mark Meadows (R-N.C.), who tweeted Wednesday that he could support the Senate bill with Cruz’s amendment.

This puts McConnell and his leadership team in a very tough spot after the July Fourth recess, when the Senate is supposed to take up the bill.

Sen. Susan Collins (R-Maine), who is considering a run for governor in 2018, is seen as a certain no because she has made clear to GOP leaders that she will not vote for legislation that includes language defunding Planned Parenthood, according to a Republican source familiar with the talks.

Sen. Rand Paul (R-Ky.) has made repeated statements that he will likely vote against the bill if it includes refundable tax credits to help low-income Americans buy health insurance — a pillar of the current Senate bill.

Republicans control 52 seats and can afford only two defections and still pass the legislation. Vice President Pence would cast the tie-breaking vote.