Senate Republicans Are Headed for a July 4th Showdown Over Health Care

Senate Republicans Are Headed for a July 4th Showdown Over Health Care

REUTERS/Gary Cameron

It’s not clear whether it’s a bluff or a growing conviction, but Senate Majority Leader Mitch McConnell (R-KY) is determined to schedule a vote before the July 4th recess on the Senate Republican version of a plan to repeal and replace the Affordable Care Act.

Senate Republicans declared the House-passed American Health Care Act – largely the handiwork of the arch-conservative Freedom Caucus – dead on arrival last month and vowed to draft a somewhat kinder, gentler alternative more palatable plan to attract moderates whose votes will be essential in passing any plan.

Related: GOP Plan for Expanded Medicaid Recipients Delays the Inevitable

The two chambers were hopelessly divided over many aspects of health care reform, from the basic architecture of health insurance premiums, benefits, and subsidies to the future of Medicaid for low-income Americans. And even within the Senate Republican caucus, ideological differences among more moderate members like Susan Collins of Maine and Bill Cassidy of Louisiana and dyed in the wool conservatives like Rand Paul of Kentucky and Ted Cruz of Texas seemed insoluble.

After weeks of wheel spinning, the Senate returned from the Memorial Day recess on Tuesday with a sudden surge of hope that the 52-member GOP majority could somehow strike a compromise in the coming month. On the same day, the insurance giant Anthem announced it would stop offering policies in the Ohio marketplace under Obamacare.

Sen. Rob Portman (R-OH), a major player in the health care debate, cited Anthem’s decision as further proof that Congress must move swiftly to pass legislation to prevent the collapse of Obamacare. Anthem is just one of a handful of major insurers that have already announced they were pulling out of Obamacare marketplaces, and Portman warned that the flight of insurers was a problem “not just in Ohio but across the country.”

Without providing a clear workable framework replace Obamacare, McConnell and other top Senate Republicans reportedly outlined a series of sweeteners and concessions to moderates at a lengthy closed-door meeting that was also attended by Vice President Mike Pence.  

Related: GOP Struggles to Explain AHCA’s $880 Billion Medicaid Cuts

McConnell told his members that “failure is not an option,” and later, he informed President Trump at a White House meeting that the Senate would likely vote on health care before the July 4 recess.

It’s perfectly conceivable that McConnell might press ahead with a floor vote on health care legislation before the end of the month without any assurance the plan will pass. He reportedly has grown impatient with the GOP’s star-crossed crusade to dismantle Obamacare which is threatening to clog up the legislative calendar and push tax reform, infrastructure and other important measures into the following year.

If the Senate manages to pass a health care reform bill of its own, that may put enormous pressure on House Speaker Paul Ryan (R-WI) and conservative forces in the House to consider rallying behind the Senate version for the sake of fulfilling their long-standing campaign pledge to repeal and replace Obamacare. Or they might dig in their heels and refuse to go along.

But there are still scores of differences among the Senate Republicans on how best to proceed that need to be ironed out in the coming weeks if McConnell has a chance of meeting his early July deadline.

Far and away the biggest division among senators is the fate of the Medicaid program for the poor and the expanded Medicaid coverage for millions of other childless adults in 31 states and the District of Columbia approved during the past four years under Obamacare.

The House-passed bill would continue the expanded Medicaid funding until 2020 and then gradually phase it out. The House bill would also slash the traditional Medicaid program by $834 billion over the coming decade, to help offset the cost of eliminating a score of Obamacare tax increases.

The issue in the Senate largely pits senators from states that accepted expanded Medicaid, like Alaska, West Virginia and Ohio, and senators from mostly red states that rejected the additional funding but now want their states to receive some added compensation out of fairness.  It also pits more conservative members who favor speeding up the phase-out of expanded Medicaid against those like Portman who want a more gradual elimination of the program – to create a “smooth glide path.”

Related: Here’s How Nevada’s Revolutionary ‘Medicaid for All’ Plan Would Work

There is also strong moderate sentiment against the House proposal for slashing Medicaid spending to pay for tax cuts. And a plan backed by the House and the Trump administration to convert Medicaid from an open-ended entitlement to a per-capita block grant to the states has also run into serious opposition.

Meanwhile, the fate of two crucial Obamacare regulations, barring insurers from charging much higher premiums to people with preexisting medical conditions and mandating ten “essential” health care services in all policies is also very much at issue in the Senate.

 Conservative favor a highly controversial provision in the House bill that would allow states in some cases to seek waivers to be exempted from those and other requirements. However, more moderate senators are fighting to preserve those protections. McConnell reportedly has proposed dropping the House waiver related to pre-existing conditions but allowing waivers to other regulations, including the essential services requirement.

There are also big differences within the Senate over how best to stabilize the individual insurance market that is buckling under losses and uncertainty over future regulations and prevent premiums and other out-of-pocket costs from getting out of hand.

Related: GOP Plan for Expanded Medicaid Recipients Delays the Inevitable

Many Senate Republicans fear that the House proposal for replacing Obamacare refundable tax credits targeted solely to low-income Americans with less generous tax subsidies available to almost anyone based on age will force millions of people out of the market. They are seeking adjustments that would provide more assistance to the poor and deny subsidies to wealthier people.

President Trump’s refusal to guarantee the continued flow of about $7 billion a year in federal subsidies to insurers to help reduce the out-of-pocket costs of low-income policyholders has also destabilized the insurance market and threatens to drive up premium costs next year.  If the Senate is looking to stabilize the individual market, then a measure is needed to permanently lock in the cost-sharing subsidy.

Whatever finally emerges from the intraparty talks in the Senate will differ dramatically from the version the House passed in early May, and seemingly the two chambers would be miles apart in forging a compromise package.

Related: Five Ways Trump Can Cripple Obamacare

For now, the forecast for Senate Republican success is hazy, according to Joe Antos, the health care expert with the American Enterprise Institute, although that could change as McConnell begins to show his hand and the Congressional Budget Office (CBO) calculates the likely effect of the bill on health care enrollment and premium costs.

With the GOP holding a narrow 52 to 48 majority in the Senate, McConnell can’t afford to lose more than two Republicans and still pass a bill under special budget reconciliation rules. More than a half dozen moderates and conservatives have threatened to bolt unless their concerns are met.

While whatever ultimately emerges from the Senate will displease many conservatives in the House, Antos argues that the House will have no alternative but to vote for the Senate version, because it could take months to reconcile all their differences in a conference committee.

“The reason I think that the House would vote for whatever came out of the Senate is that would be their only opportunity – this is it,” he said in an interview. “If they don’t vote for it for whatever it is, then they are voting to keep Obamacare. So how can they do that?”

Moreover, he said, that if conservatives such as Cruz and Paul end up voting for the Senate version, “it’s going to be really hard for the Freedom Caucus to say publicly say, ‘Well, yeah, but . . .”