Senate Majority Leader Mitch McConnell will take another run at an Obamacare repeal plan today, and this time he’s got leverage: more than $230 billion he can spend over 10 years to sweeten the bill for Republican holdouts.
A new proposal crafted in secret by McConnell and top aides discards earlier plans to repeal a series of Obamacare taxes on the wealthy, a move that effectively frees up that cash. He could spend the money on more care to win support from moderates.
McConnell of Kentucky hasn’t said how he’s planning to satisfy moderates within his party without alienating conservatives, who support deep spending cuts. Republicans say leaders haven’t told them yet which components of the part of the U.S. healthcare system will benefit.
“I want to see how funds are used to help ensure that people can get access to affordable coverage, and that’s the key,” said Senator Rob Portman of Ohio, who objected to McConnell’s original bill. “But we don’t have the specifics."
McConnell also has the flexibility to add about another $200 billion in spending to the bill that was put toward deficit reduction in his first draft, leaving him with some $430 billion with which to try to win over votes.
For the measure to pass, and Republicans to live up to their promise to eliminate President Barack Obama’s signature domestic accomplishment, they can lose no more than two GOP votes from their 52-48 majority amid unanimous Democratic opposition.
Without having seen McConnell’s latest plan, more than half a dozen Republican and Democratic senators have discussed alternatives—a bipartisan approach that would infuriate conservatives and probably would be a hard sell in the House, where lawmakers in May passed their own plan to gut Obamacare.
Senate Republicans are scheduled to meet Thursday morning to go over details of McConnell’s proposal, which likely will be released beforehand.
Only then will it become clear whether Republican leaders have found a balance between moderates’ desire for more spending for Medicaid and subsidies for Obamacare’s insurance exchanges, and conservatives seeking a smaller government role in healthcare.
“There’s a lot of different viewpoints, a lot of different feelings about it and they all have to be taken into consideration if you want to put together enough votes to pass the doggone thing,” said Senate Finance Chairman Orrin Hatch, a Utah Republican.
GOP Senator Rand Paul of Kentucky, a Tea Party stalwart, said Wednesday he will oppose the new measure and vote to block it from floor consideration, without having seen the legislation. That means Republicans can lose support from only one more of their members.
“The new bill looks a lot like the old bill except it spends more money, taxes more and does little to assuage the concerns of conservatives,” Paul told reporters. “At this point, I cannot support the bill.”
As part of a drive to lure other support with more health funding, Republican leaders will retain several Obamacare tax increases, a reversal from the earlier measure, according to a GOP aide familiar with the plan. That includes Obamacare’s 3.8 percent tax on net investment income for people who earn more than $200,000 and couples with incomes of more than $250,000, as well as a 0.9 percent Medicare surtax on the same incomes.
The plan will also scrap a tax break for health insurance executives’ pay, the aide said, keeping an Obamacare provision allowing health insurance companies to deduct from their taxes $500,000 of the pay of each top executive. That’s a tougher restriction than the limit imposed on other companies, which is $1 million per executive.
Those changes are designed to address concerns of moderates, including Bob Corker of Tennessee and Susan Collins of Maine, after Democrats and other critics said the earlier version cut taxes for the wealthy at the expense of low-income and sick people. The three tax items produce a revenue stream of nearly $232 billion over a decade.
Where that money will go is a key question for moderates after the nonpartisan Congressional Budget Office said the earlier GOP health bill would cause 22 million fewer Americans to have health insurance by 2026.
Collins said the Medicaid funding in McConnell’s earlier proposal, which the CBO said amounted to a cut of $772 billion from current projections over a decade, would hurt rural hospitals in her home state and others. Portman, whose home state of Ohio took advantage of Obamacare’s Medicaid expansion, is among those concerned about funding levels and how the expansion is phased out. Corker is among those who want more generous subsidies for people buying individual policies on insurance exchanges.
Republican leaders have considered boosting market stabilization funds for the exchanges. McConnell’s earlier proposal provided $50 billion over four years to bolster insurance markets, in addition to cost-sharing subsidies to insurers covering lower-income people. It also included a state innovation pool of $62 billion over eight years that would allow funding for high-risk pools, reinsurance and other items.
Republican leaders already have indicated that the new measure will have some provisions demanded by some moderates, including $45 billion sought by Portman and Senator Shelley Moore Capito of West Virginia to address opioid addiction.
Meanwhile, the balancing act with conservatives is at least as tough.
Republicans are waiting to hear back from the CBO before deciding whether to include an amendment proposed by Republican Senator Ted Cruz of Texas and GOP Senator Mike Lee of Utah.
They want to allow insurers to offer cheap, bare-bones plans alongside those that meet the more comprehensive coverage requirements of Obamacare. Critics in both parties say the proposal would essentially put people with pre-existing conditions in the Obamacare insurance pool and enable young, healthy people to buy cheaper plans in a separate pool.
Senator John Cornyn of Texas, the No. 2 Republican leader, said no decision has been made on whether to embrace the proposal. Corker said two versions of the new health bill—one with the Cruz-Lee proposal and one without—will likely be released Thursday and analyzed by the CBO.
Cruz said Thursday he won’t vote to let the health bill advance unless his proposal, or something very similar, is sent to the full Senate.
“The bill will not have the votes to go forward if there are not meaningful protections for consumer freedom that significantly lower premiums,” Cruz told reporters.
Outside groups that promote small government and low taxes, including the Club for Growth and Tea Party Patriots, are keeping the pressure on Republicans to simply repeal Obamacare and replace it later.
“Failure is not an option,” said Jenny Beth Martin, president and co-founder of Tea Party Patriots. “This is what the voters voted for them to do.”
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