By Stephanie Armour, Kristina Peterson and Louise Radnofsky
WASHINGTON -- Senate Republican leaders released a health
overhaul Thursday that would undo major parts of the Affordable
Care Act and transform a large part of the American health-care
system by changing and cutting the underlying funding for the
Medicaid program.
The bill would reverse the ACA's expansion of Medicaid, a move
that could affect millions of people, and would for the first time
limit states' overall Medicaid funding from Washington. It also
would eliminate the requirement in the 2010 law that most Americans
sign up for health insurance, and provide instead less-robust tax
credits than the ACA to help people afford insurance. It would
repeal hundreds of billions of dollars in taxes on businesses and
high-income households and retroactively cut taxes on capital
gains.
The Senate plan in many ways echoes a health bill passed by the
House last month, but it contains several differences. It isn't
clear if those changes, such as the shape of the tax credits and a
more gradual phasing-out of the Medicaid expansion, would be enough
to attract more centrist Republicans without alienating the most
conservative lawmakers in both chambers.
The challenge quickly became evident when four GOP senators --
Ted Cruz of Texas, Ron Johnson of Wisconsin, Mike Lee of Utah and
Rand Paul of Kentucky -- said they couldn't vote for the bill as it
stood, though they were open to negotiation.
A more centrist GOP senator, Dean Heller of Nevada, who faces
re-election next year, said he had "serious concerns" about the
bill, particularly its effect on Medicaid recipients.
With 52 Republican senators, Majority Leader Mitch McConnell can
lose no more than two GOP votes for the bill to pass under a
special process tied to the budget.
Thursday's release of the 142-page bill, after its elements had
been closely held by GOP leaders, launched a fast-moving process
that top Republicans hope will culminate in a new health law's
passage possibly before Congress's August recess. Senate GOP
leaders say they plan to vote next week; if the bill passes, then
the House could take it up, or the two chambers could try to reach
a compromise on the two bills.
The Senate bill, mirroring its House counterpart, keeps some of
the ACA's provisions in place, like the tax credits to subsidize
health coverage. But it would shift the income eligibility and some
of the structure for those credits, which in some cases could
reduce their size for older Americans, in particular.
In other areas the bill takes fuller aim at the ACA, former
President Barack Obama's signature law. The enhanced federal
funding the 2010 law provided for states to expand Medicaid would
be phased out starting in 2021 and eliminated by 2024. States could
still keep the expansion, but they wouldn't get the additional
federal funds.
Beyond that expansion, federal funding for Medicaid would be
capped for the first time. States would be given a choice on
whether they would prefer block grants or a per-capita payment for
beneficiaries.
In 2025, the bill would lower the growth rate for Medicaid
spending, a move that alarmed some centrist Republicans. "That
translates into literally billions of dollars, and it would result
in states either cutting back on eligibility or rural hospitals
going under because of uncompensated care," said Sen. Susan Collins
of Maine. "Those are serious problems."
Among Republicans' loudest complaints about the ACA, sometimes
called Obamacare, was that it imposed several new taxes, and the
GOP push would undo most of them.
Like the House bill, the Senate bill would repeal a 3.8% tax on
investment income retroactively to January 2017 and delay the
repeal of a 0.9% payroll tax until 2023. Both of those taxes only
apply to individuals making more than $200,000 and married couples
making more than $250,000. A tax on generous employer health plans,
which has yet to go into effect, would remain but be further
delayed, until 2026.
Democrats criticized the bill for curbing Medicaid funding while
repealing taxes on the wealthy, and referred to President Donald
Trump's recent characterization of the House version of the bill as
"mean."
"The House and Senate bills should be known as 'mean' and
'meaner,' " said Sen. Ron Wyden (D., Ore.). "Republicans will keep
telling Americans they're fixing their health care right up until
the minute it's taken away."
GOP leaders were quick to note that the text was subject to
change.
"Right now we've got members who are going to be interested in
seeing it, digesting it, and then looking to see if there are
things we can do to refine it, make it more acceptable to more
members in our conference to get to 50" votes, said Sen. John Thune
(R., S.D.).
In particular, Republicans may seek to "dial" the levels up or
down on the tax credits and phase-out of the enhanced funding for
Medicaid expansion, Mr. Thune said.
Other Republicans, like Mr. Paul, said the law didn't go far
enough in repealing the ACA, and the Kentucky senator said he
didn't favor the government subsidizing the cost of health
insurance.
"The bill needs to look more like repeal of Obamacare, and less
like we're keeping Obamacare," Mr. Paul said.
If the Senate splits 50-50, Vice President Mike Pence would
break the tie.
Mr. McConnell has set a rapid-fire timeline for passage. An
analysis by the nonpartisan Congressional Budget Office, laying out
the bill's effect on cost and coverage, could come as early as
Monday. Senate Republicans plan to vote on the bill days later, and
then it would be taken up by the House.
The CBO report on the House bill showed it would leave 23
million more people uninsured while reducing the cumulative federal
deficit by $119 billion in the next decade compared with current
law.
House Speaker Paul Ryan (R., Wis.) declined to discuss the
Senate bill's prospects in the House Thursday. At the White House,
Mr. Trump said he hoped the Senate would pass a health bill "with
heart" and that he was pleased with the legislation unveiled
earlier in the day.
Mr. Trump was heavily engaged in pushing the health bill through
the House, sometimes dialing lawmakers late into the night. He has
taken a more hands-off approach with the Senate, but a senior White
House official said that could change.
Mr. Obama, in a post on Facebook Thursday, urged Republicans and
Democrats to work together on a health bill but said the Senate's
proposal would harm many Americans.
"Simply put, if there's a chance you might get sick, get old, or
start a family -- this bill will do you harm," he said in the
post.
Under the bill, states would get billions more in funding
largely to help stabilize markets for insurance bought on exchanges
that were set up under the ACA. The measure also includes a formal,
temporary appropriation for billions of dollars for health insurers
to offset subsidies that reduce costs for low-income consumers,
though it faces procedural challenges.
Insurance-market woes in some states have prompted health plans
to withdraw entirely, citing a combination of problems succeeding
under the Affordable Care Act and additional turbulence under
Republicans.
--Byron Tau and Natalie Andrews contributed to this article.
Write to Stephanie Armour at stephanie.armour@wsj.com, Kristina
Peterson at kristina.peterson@wsj.com and Louise Radnofsky at
louise.radnofsky@wsj.com
(END) Dow Jones Newswires
June 22, 2017 18:05 ET (22:05 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.