Senate Republican leaders are planning to put out a new health care bill this week, with revisions aimed at winning over enough holdout GOP members to get the plan over the finish line. The 52-member GOP caucus can only afford to lose two votes. But when Congress returned from its July Fourth recess Monday, several policy disputes remained — leaving the bill’s chances of passage in serious jeopardy.
As the Senate picks up the health care debate, here’s a guide to the make-or-break sticking points that stand between Republicans and their longtime goal of rolling back former President Barack Obama’s health care law.
Full vs. partial repeal
The years-long fight in Washington over the Affordable Care Act has always been about more than just health care. The law that Obama signed in 2010 was criticized by some on the left, but overall it reflected the Democratic Party’s preferred method of governing: it expanded the social safety net; introduced basic private sector regulations; and paid for the changes by boosting government spending and shifting resources from wealthy individuals and companies to the less fortunate. For conservatives, the law has always represented a costly federal overreach into Americans’ lives — the kind of government-driven, regulation-heavy solution that Ronald Reagan famously decried in his first inaugural address. At its core, the debate is as much about the size and role of government as it is about complex, nuts-and-bolts health care policy.
That’s why Republicans have struggled this year over how far to go in repealing and replacing the Affordable Care Act. Republicans promised to gut the law for four straight election cycles — going all the way back to the 2010 midterm election. But since President Donald Trump took office and the GOP began crafting its health care overhaul in earnest in January, the party has been pulled in opposite directions by its conservative and moderate wings.
The intraparty debate over a full-versus-partial repeal nearly sank the House GOP’s bill. The same dynamic has played out in the Senate, where conservative Republicans like Sens. Ted Cruz of Texas and Mike Lee of Utah have tried to push the bill as far to the right as possible. Moderate Republicans have insisted on a plan that would stop well short of a full repeal and replace, while maintaining popular parts of the law like protections for people with pre-existing conditions and the rule allowing young people to stay on their parents’ policies until age 26.
The final decision will be driven as much by politics as anything else — and if there is a vote in the Senate, it’ll be one of the hardest votes for Republicans in years. Some Republicans have already concluded that they’re willing to oppose the bill and face the backlash from the party’s conservative base. Sen. Shelley Moore Capito, R-W.Va., has said she would vote against the Senate’s current bill even if she was the deciding vote. “If I have to be that one person, I will be it,” Capito told Politico last weekend.
On the other side, Cruz and Lee are pushing an amendment that would effectively undercut the Affordable Care Act’s insurance regulations by allowing insurers to sell bare-bones policies that don’t comply with the current law. The proposal is a concession from conservatives: even with the change, the law would still keep the basic framework of the Affordable Care Act intact. But the proposal also amounts to a red line that Cruz and Lee appear unwilling to cross.
If in the end Republicans like Cruz and Sen. Rand Paul, R-Ky., are partially responsible for killing the bill — along with some moderates like Sen. Susan Collins of Maine — they’ll face questions from voters next year about why they failed to meet one of the party’s principal promises. They could also face anger from conservative voters if Republicans fail to pass a bill and are forced to negotiate changes to the existing law with Senate Democrats, led by Minority Leader Chuck Schumer, D-N.Y., a hated figure on the right. Senate Majority Leader Mitch McConnell, R-Ky., has already dismissed a repeal-now, replace-later approach, and warned that GOP leaders would have to sit down with Schumer if this bill fails.
While the Senate health care bill would roll back some provisions of the Affordable Care Act, it would completely overhaul the Medicaid program. And over the week-long July Fourth recess, more Republicans came out against the bill’s proposed Medicaid cuts. Even some Republicans who consistently support the Senate GOP leadership’s policy agenda came out against the bill, among them Sen. John Hoeven of North Dakota. Hoeven said in a statement that he does not “support the Senate health care bill in its current form.”
Although Hoeven focused on premiums and deductibles, he mentioned Medicaid while outlining steps to reform the health care system. In opposing the bill, Hoeven joined a growing number of Republican senators who have said they won’t vote for the bill since it was released last month. For most, Medicaid has been the main sticking point.
The Senate bill would cap and reduce Medicaid funding. Beginning in 2020, states would have to decide between receiving a block grant or a set amount of funding for each person enrolled in the program, which serves low-income people and the disabled. Under the current system, there is no cap on Medicaid spending. Republicans have long called for cutting spending on Medicaid, arguing that spending on Medicaid, Medicare and Social Security are the biggest drivers of the nation’s long-term federal deficit.
As part of the proposal, the Medicaid expansion under the Affordable Care Act would phase out by 2024. That change would cause 14 million people to lose their health insurance, according to the Kaiser Family Foundation. Some Republicans who came out against the bill last month, like Sen. Dean Heller of Nevada, represent states that expanded Medicaid under Obama’s health care reform, and covered hundreds of thousands more people. Nevada, for instance, had an 89 percent increase in monthly Medicaid enrollment after the Affordable Care Act took effect, the second fastest growth in the country after Kentucky, Kaiser found. Capito’s home state of West Virginia saw a 59 percent increase in monthly Medicaid enrollment after the law.
The resistance to the bill from Republicans like Capito and Collins reflects a long-established truth in Washington: once Americans start receiving a new social service, it’s hard for lawmakers to take it away, even when the policy — or the politics behind the policy — goes against their deepest-held beliefs. For that reason, the Medicaid cuts were a non-starter when the bill came out last month, and they remain a non-starter now as McConnell and the rest of the Senate GOP leadership forge ahead with their health care plan.
The Senate broke from the House on the issue of tax credits, a feature under the Affordable Care Act that helps people cover health insurance costs. The House bill called for an age-based tax credit system, that would start at $2,000 for young people and go up to $4,000 for people in their sixties. The revised Senate bill would keep the current law’s tax credit system in place, by including subsidies based on income, not age.
But the bill would change the eligibility standard so that people earning up to 350 percent of the federal poverty line — but no more — would qualify for credits to help pay for plans on the health care exchanges created under the Affordable Care Act. Currently anyone earning up to 400 percent of the poverty line is eligible. The Senate bill would also lower the subsidies as people grow older, helping make the credits less generous overall than they are under the current health care law.
Democrats argue that the bill’s tax structure would lower premiums, but still keep them out of reach for many Americans. In its report on the bill, the Congressional Budget Office estimated that “despite being eligible for premium tax credits, few low-income people would purchase any plan.” While some Republicans have defended the proposal, others — like Sen. Mike Rounds of South Dakota — have called for more generous subsidies.
The disagreement puts Senate GOP leaders in a difficult position. Raising subsidies, or taking other steps to move the bill to the left, would risk losing support from the caucus’ conservative wing.
The Affordable Care Act raised taxes on high-income earners, drug companies, health insurers and medical device makers to help cover millions of low and middle-income Americans. The law included an 0.9 percent Medicare payroll tax and a 3.8 percent tax on investment income, both of which applied to individuals earning more than $200,000 per year and married couples who file joint tax returns and earn more than $250,000 annually.
Nearly all of the law’s taxes would be eliminated under the Senate bill, including the so-called “Cadillac” tax on expensive employer-provided health care plans. To critics of Obamacare, the Cadillac tax came to symbolize the law’s excessive taxation and regulation. Republicans have argued for years that the law is a thinly-veiled redistribution of wealth from the top to the bottom.
That argument was popular on the right back in 2010. But now, the tax issue is coming back to bite Republicans as they try to push through their health care bill. Democrats have characterized the bill as a give back to the rich that would kick millions of poor people off their insurance, and so far Republicans have failed to come up with a solid response. According to the Tax Policy Center, 44.6 percent of the tax cuts would go to the nation’s wealthiest 1 percent of households, which earn $875,000 or more per year.
Normally, Republicans could ignore or dismiss the criticism as run-of-the-mill liberal opposition. Senate GOP leaders have tried doing that. But the combination of a tax cut for wealthy people and the Medicaid overhaul has significantly weakened their position. The politics are bad for Republicans, no matter how they try to spin the bill. The bill’s fate isn’t riding on the tax cuts alone. But it makes a tough vote for Senate Republicans that much harder.
The original Senate bill included $2 billion in funding to fight the nation’s opioid crisis. The new plan will reportedly increase the funding to $45 billion over the next decade. It’s a major jump, aimed at winning over senators in states with high rates of opioid addiction who remain on the fence on the bill. The higher funding level would also send a signal that the Senate is taking the issue more seriously, at a time when the opioid epidemic appears to be spiraling out of control, and after an election where the problem was a top priority for candidates on both sides of the aisle, including Mr. Trump.
But the funding is likely not enough to get holdout GOP senators to flip their votes. If the revised Senate bill also scaled back the proposed Medicaid cuts, the increased opioid addiction funding would be a sweetener that might convince a skeptical Republican to get on board. But without significant protections for Medicaid, several senators have signaled that they won’t vote for the bill, regardless of other concessions that McConnell and his team might come up with.
That isn’t to say that senators opposed to the health care bill aren’t invested in dealing with the opioid crisis. But with any major piece of legislation, lawmakers have to pick and choose their battles, and Republicans like Capito, Collins and Heller have decided that Medicaid is a priority. If the bill goes down in defeat, however, the opioid addiction provision could spur momentum for lawmakers to tackle the issue again in the future.