Senate Health Plan Draft Relies on Subsidies GOP Has Faulted

Senate Republicans’ proposal to replace Obamacare would provide an additional $50 billion over four years to stabilize insurance exchanges, relying on a mechanism Republicans have criticized in the past as a way to keep insurers in the marketplace.

The plan, released Thursday after months of closed-door meetings, includes $15 billion a year in market-stabilizing funds over the next two years and $10 billion a year in 2020 and 2021. These payments would come in addition to cost-sharing subsidy payments, which would be extended through 2019.

Senate Majority Leader Mitch McConnell of Kentucky has previously said he wants the full Senate to vote on the measure next week, but it’s not clear if the GOP will have the votes to pass it. He didn’t say on Thursday when he’ll bring the measure to the Senate floor.

 The bill will “ultimately transition away from Obamacare’s collapsing system entirely so more Americans won’t be hurt,” McConnell said Thursday on the Senate floor.

President Donald Trump said Thursday the Republican plan will have “heart.” “It’s going to be great,” he said at an unrelated event at the White House.

Hospital Stocks

Community Health Systems Inc., Tenet Healthcare Corp. and other hospital stocks soared after the draft bill raised investor optimism for improved reimbursement for services.

Several Republicans are still skeptical of the measure, which may undergo significant changes before a vote.

Republican Senator Susan Collins of Maine “has a number of concerns,” spokeswoman Annie Clark said in a statement. They include the upcoming Congressional Budget Office analysis of many people would have insurance coverage, the effect on insurance premiums and changes in Medicaid for low-income Americans, Clark said.

 Senator Mike Lee of Utah, a conservative who has raised objections to the emerging plan, is unlikely to support the draft in its current form, said a person familiar with his thinking. Before the draft was released, Rand Paul of Kentucky had said this week he wanted to “start over” and that he objected to continuing subsidies for insurance companies.

The draft bill also would provide $62 billion allocated over eight years to a state innovation fund, which can be used for coverage for high-risk patients, reinsurance and other items. The draft bill would phase out Obamacare’s expansion of Medicaid over three years, starting in 2021.

The draft legislation repeals a series of Obamacare’s tax increases, including on health insurers and medical device sales. It also eliminates several taxes on wealthy Americans, including a 3.8 percent investment income tax and a 0.9 percent Medicare surtax.

It delays the so-called Cadillac tax on high-cost plans from 2020 to 2026, like the House-passed Obamacare replacement bill.

‘Discussion Draft’

The tax increases were a focal point of Republican ire during the drafting of the Affordable Care Act, and Republicans have regularly called for repealing them.

The 142-page bill, H.R. 1628, will be subject to significant revisions — McConnell earlier in the week called it a “discussion draft” — giving moderates and conservatives the potential to claim wins later as it heads to the floor if they are able to secure changes.

“Over the next week, we will be working to improve on this draft with broad input from health-care providers, patients, and every member of the U.S. Senate,” Republican Senator John Barrasso of Wyoming said Thursday in a statement, calling the proposal a “vast improvement” over Obamacare.

Lower Subsidies

Compared with Obamacare, insurance subsidies would generally be less generous because they’ll be based on the cost of a low-level bronze plan, rather than a silver plan. That means individuals would either have to pay more money out of pocket or buy health plans with higher deductibles.

The bill would provide subsidies for people making up to 350 percent of the poverty level, rather than the 400 percent cutoff in Obamacare. The subsidies are somewhat more generous for younger people, and for those with lower incomes. They’re least generous for older people with higher incomes, who could be required to pay as much as 16.2 percent of their income for health insurance, compared with a 9.7 percent cap in Obamacare.

To be eligible for tax credits, plans couldn’t cover abortion costs unless the procedure is to save the life of the mother or in cases of rape or incest.

The bill caps federal spending on the Medicaid program for the poor in a manner similar to the House bill. But it moves to a more stringent cap, using a broad measure of inflation, rather than medical inflation, beginning in 2025.

Like the House bill, the Senate version effectively ends both the employer and individual mandates to buy health insurance. Republicans also released a summary of the draft measure.

Republican Senator James Inhofe of Oklahoma said Thursday that the bill has his support.

“It does, but it’s just a starting point,” he said.

‘Heartless’ Bill

Senate Minority Leader Chuck Schumer of New York said the bill is “heartless” and “may be meaner” than the House version.

“This bill will result in higher costs, less care, and millions of Americans will lose their health insurance, particularly through Medicaid,” Schumer said on the Senate floor. “It seems designed to slash support for health care programs in order to give tax breaks to the very wealthy.”

The legislation is expected to result in millions of people losing insurance when evaluated by the CBO — an estimate the No. 2 Senate Republican, John Cornyn of Texas, said he expects by Monday. The CBO said the House-passed bill would result in 23 million fewer people with insurance by 2026.

Republican Senator Bill Cassidy of Louisiana, a physician, said the draft appears to meet Trump’s test of not being a “mean” bill.

“The issue is, if your loved one gets sick, do they have adequate coverage. As best I can tell, it does but I need to read the text,” he said.

Republicans negotiated with the Senate parliamentarian to see which pieces of their emerging draft comply with rules governing the use of a mechanism allowing the bill to pass the Senate with only 50 votes, plus the support of Vice President Mike Pence.

A Senate-passed bill would then go to the House, which would have the choice of approving the Senate version and sending it to Trump’s desk or negotiating a compromise version, which would then have to pass both chambers.

3 months ago byin Healthcare ReformYou can follow any responses to this entry through the | RSS feed. You can leave a response, or trackback from your own site.