What’s next?
Don’t count on the repeal effort dying in the Senate. Declarations by Sen. Tom Cotton (AR), Sen. Rand Paul (KY) and Sen. Bill Cassidy (LA) and others that the AHCA was dead on arrival were a regular refrain during AHCA 1.0 in March. Since the bill was revived by the Rep. Tom MacArthur and Rep. Mark Meadows compromise amendment a couple of weeks ago, the response from the other side of the hill has been decidedly more muted and for good reason.
It took them a while to figure it out but the Senate has the same political problems as the House, namely:
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Denying a newly elected President a legislative victory especially when it fulfills a campaign promise AND when the president is the leader of your party is bad form and detrimental to your shared agenda.
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Repeal of certain provisions of the ACA like the taxes and Medicaid expansion lower the revenue baseline against which a tax reform bill will be scored. No repeal, no lowered baseline and tax reform – already a daunting task – gets more difficult.
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Right or wrong, most people blame the ACA for higher premiums and deductibles regardless of where they get their insurance. If Congress doesn’t do something, the public will not address their ire to Republicans or Democrats, they will target incumbents. There are, of course, more Republican incumbents than there are Democrat incumbents.
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The disproportionate amount of attention directed to impacts on the nongroup market while changes to Medicaid remain relatively unscrutinized gives Republicans more latitude to achieve long-sought reform objectives.
Given that landscape, doing nothing is not a great option for The World’s Most Deliberative Body.
Neither is a bipartisan agreement.
Senate Democrats have made it clear that they will not consider a bipartisan bill as long as Republicans insist on repeal. Ironically, some of the things being repealed – the taxes for example – have bipartisan support. Other provisions – like the individual mandate – aren’t actually being repealed at all (the penalty is just being lowered to $0.00.) Meanwhile Republicans are welded to the political promise of repealing the ACA – even if that isn’t actually what they are doing.
But we digress.
Amending the ACA, while keeping its basic structure of a system of national subsidies and mandates that Democrats favor without making some difficult and politically painful decisions seems like an impossible task.
The rocks on which the individual market has foundered are the vast differences across 50 states in household median income, education levels and pre-ACA insurance regulation. Overcoming those differences has only been made more difficult by the aversion of the Obama administration and Congress to taking a tougher position on the individual mandate penalty and reforming enrollment practices.
Absent some tough love from the federal government, the other option, massive increases in federal subsidization of the individual market, is a non-starter for Republicans and even some Democrats.
The Senate has no choice but to forge a bill within the Republican conference, use reconciliation to pass it and get it back to the House for final approval.
The most fully developed thoughts on repeal and replace or repair of the ACA are embodied in the Patient Freedom Act of 2017, otherwise known as the Cassidy-Collins bill, S. 191. This bill was developed to be a bipartisan solution, which for the aforementioned reasons seems unlikely. However, it does, at least represent a starting point.
We put together another handy clip n save chart with a side-by-side comparison of both bills:
The other best and most complete thinking comes from the Republican Governor’s Association. They wrote a white paper in February that articulates their early views on reform of Medicaid. Since then, we understand the RGA has been working with Senators to develop a proposal even those red states that expanded Medicaid can tolerate. One thing is clear; they do not think the status quo is acceptable.
You can read their initial proposal here. (note: the white paper contains a “confidential” watermark but is widely available through major news outlets which is how we obtain it.) Major points are:
- States should be given a choice between conversion to a per capita or block grant model for one or more population groups and continuing with current structure. Expansion populations would be funded under tradition FMAP match.
- For states that select a per capita financing arrangement:
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The initial base amount would take into account all federal funding earned through or supported by state contributions, provider taxes and other state or local arrangements.
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Each eligibility category would have its own per capita cap phased in by population beginning with childless adults, then parents and caretaker relatives followed by children and pregnant women.
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The last population to be phased in would be the disabled and dual eligible elderly. In this case states that chose to move this population to a per capita financing system would be allowed to discontinue Medicare cost-sharing and the state contribution for Medicare Part D clawback. Medicare would become responsible for providing Medicare cost-sharing for dual eligibles and people with disabilities.
- For the per capita base amount, the Governors have asked Congress to consider state specific per capita expenditures for each eligibility group; or a national average per capita expenditures by eligibility group or state specific per capita expenditures for existing populations and a national average for any new members.
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For the annual growth rate under a per capita system, the Governors’ plan calls for consideration of either a national average trend or a variable trend rates based on current spending relative to the national average.
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For States that opted for a block grant financing system:
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They would be required to convert financing for adult expansion populations into a block grant but could choose whether or not it would apply to other eligibility categories.
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They could switch from the federal matching arrangement to a financial maintenance of effort system based on state expenditures in a designated base year.
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Medicaid would be divided, like Medicare into parts. Part A would serve nonelderly nondisabled adults though a CHIP-like model. Part B would serve beneficiaries eligible for Long Term Services and Supports. Finally Part C would serve individuals with disabilities and low-income seniors and would be funded as Medicaid is today with an open ended federal commitment.
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For states that elected to remain under the existing financing system
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Medicaid enrollment at the enhanced federal match rate would be frozen and all current enrollees grandfathered
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All new enrollees would be funded under the traditional match rate for that population.
To prepare for the daunting task before him, Senate Majority Leader Mitch McConnell has assembled a working group of Senators. They are all worth watching:
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Majority Whip John Cornyn (a great twitter-er. Follow him @Johncornyn)
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Conference Chairman John Thune
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Republican Policy Committee Chairman John Barrasso, a physician and a respected voice on ACA repeal for many years.
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Senate Budget Committee Chairman Mike Enzi whose ultimately responsible for what meets the requirements of the Byrd Rule
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Senate Finance Committee Chairman Orrin Hatch who wants to manage expectations and focus on the “art of the doable.”
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Senate Health Committee Chairman Lamar Alexander whose priorities are helping people who won’t have insurance options in 2018; lowering premiums, giving states more flexibility on Medicaid; and protecting people with pre-existing conditions.
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Sen. Pat Toomey (PA) whose state expanded Medicaid and will be a staunch ally of the Governors’ position above.
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Sen. Ted Cruz (TX), whose well-known conservative positions and indifference to successful legislation make him a regular thorn in the side of leadership will advocate for state-based solutions and limitations on federal expenditures.
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Sen. Mike Lee (UT) who is also known for his advocacy for federalism will likely align with Cruz on many topics.
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Sen Tom Cotton (AR) whose state expanded Medicaid using a fairly innovative program that integrated with employer-based insurance. He was an early and outspoken critic of the AHCA.
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Sen. Corey Gardner (CO) who comes from a blue state that expanded Medicaid will also be an ally of Governors – and not just the Republicans
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Sen. Rob Portman (OH) was also a critic of the AHCA and hails from a state that expanded Medicaid. Gov. John Kaisich of OH has been active on developing a reform agenda for the program.
Conspicuously absent from the Majority Leader’s list is any one of the Republican gentleladies of the Senate. They are as rare as hen’s teeth but expect the McConnell to ask Shelley Moore Capito (WV), Susan Collins (ME), Joni Ernst (IA), or Lisa Murkowski (AK) to join the group.
Senate Republican leadership will not set forth a timeline for passage of a Senate bill but here are some milestones to watch:
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CBO score on AHCA as passed by the House. Look for it within the next couple of weeks. The Senate needs it to establish the bill reduces the deficit, as required by reconciliation.
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The Byrd Bath. Once the CBO score is available, leadership can go to work consulting with the parliamentarian to identify any provision that would be considered extraneous and subject to successful challenge by the minority.
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July 4 recess. This break that runs from July 3 to July 7 may serve as a backstop to a vote concluding the Senate’s work. If the Senate passes a bill before July 4, the House will have time to approve the final version before August recess which begin July 31.
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August recess. If the Senate does not complete its work before the July 4 break, they will likely work toward completion by July 31.
Don’t look for any Committee action. The plan in the Senate is to reach consensus among caucus members and go right to the floor for a vote.
For more information, listen to the call Health Care Sector Head Tom Tobin and I held last week here.
If that isn’t enough, call or email. We are always here. Although the House went home for a week, someone needs to keep an eye on the Senators
Emily Evans
Managing Director
Health Policy
