Medicaid cuts make the bill a tough sell with GOP moderates.
The revised Senate Republican health insurance bill released Thursday makes a major change from the previous version in an effort to placate conservative lawmakers. But the new version still includes the big cuts to Medicaid that more moderate Republican senators have said they don’t like.
That creates a tricky tension point as Republicans aim to vote on this legislation, which would repeal and replace parts of Obamacare, as soon as next week: If the Republican senators who were holdouts before because they opposed the Medicaid cuts refuse to backtrack from their public stances, this bill will die. Remember, for the bill to pass on a party-line vote, Senate Majority Leader Mitch McConnell and other party leadership must persuade 50 of the Senate’s 52 Republicans to back it. Two, Sen. Susan Collins of Maine and Sen. Rand Paul of Kentucky, have said they oppose it.
Here’s a quick rundown of the biggest changes in the new version of the Better Care Reconciliation Act and how they affect the legislation’s chances of passage:
A variation on a provision dubbed the “Cruz amendment” after its author, Texas Sen. Ted Cruz. This is the biggest change, both in terms of policy and politics. The amendment would essentially allow insurers who sell the highly regulated Obamacare plans that cover a broad range of services to also sell skimpy or high-deductible plans. (There are other important details, but that’s the gist of it.)
Since most corporations prefer to be subject to fewer regulations, this amendment might sound like a win for insurance companies. But one of the insurance industry’s largest advocacy groups, America’s Health Insurance Plans, circulated a memo this week condemning the amendment, and the Blue Cross Blue Shield Association, a lobbying group representing one of the most important insurers in the marketplaces, wrote to senators to call the proposal “unworkable.” The insurers’ concerns are related to the issues that policy wonks have been warning about: If the Cruz amendment became law, healthy people would flock to the unregulated, cheaper market, leaving the Obamacare markets full of people with high health care costs. The updated bill sets aside more money — an additional $70 billion — to give to insurers to offset the costs of those sicker enrollees, as well as $132 billion in grants to states to stabilize insurance marketplaces.
The option to offer skimpy plans is aimed at winning over deeply conservative Republican senators including Paul, Cruz, Ron Johnson of Wisconsin and Mike Lee of Utah, who have argued that the earlier version of the bill preserved too much of Obamacare. But the new version lands in an awkward middle ground: It still falls short of the level of deregulation that the Cruz amendment aims to achieve, but it also goes further than what some senators have said they can support, because it could leave people with pre-existing conditions open to higher costs. We should also note that Senate Republican leaders, in their updated draft of the legislation, left this provision in brackets, leaving open the possibility that they will remove it.