Senate Republicans unveil new health bill, but divisions remain

Changes by Senate leaders, seeking 50 votes to pass, meet with skepticism.
Published July 14 2017
Updated July 14 2017

WASHINGTON — Senate Republican leaders unveiled a fresh proposal to repeal and replace the health care law, revising their bill to help hold down insurance costs for consumers while keeping a pair of taxes on high-income people that they had planned to eliminate.

But the measure was immediately imperiled when two Republican senators, moderate Susan Collins of Maine and conservative Rand Paul of Kentucky, announced they were not swayed — even on a procedural motion to take up the bill next week.

One more defection would doom the bill and jeopardize the Republicans' 7-year-old quest to dismantle the health law that is a pillar of President Barack Obama's legacy. In a sign that more could follow, two other Republican senators, Lindsey Graham of South Carolina and Bill Cassidy of Louisiana, unveiled their own alternative plan, just minutes before Senate leaders offered their latest.

Sen. Shelley Moore Capito, R-W.Va., expressed "serious concerns about the Medicaid provisions" in the latest draft, although she did not reject it.

With the revised bill, the majority leader, Mitch McConnell, R-Ky., had hoped to win the 50 votes he needs to win Senate passage. But the changes may not have been enough to bridge the vast divide that has opened between the Senate's most conservative Republicans, who had vowed to destroy the health care law "root and branch," and its moderate Republicans, who worry that deep cuts to Medicaid would leave too many in their states without health care.

Republicans said the revised bill would provide roughly $70 billion in additional funds that states could use to help reduce premiums, hold down out-of-pocket costs and otherwise make health care more affordable. The bill already included more than $100 billion for such purposes.

But the new bill, like earlier versions, would still convert Medicaid from an open-ended entitlement to a system of fixed payments to states. In the event of a public health emergency, state Medicaid spending in a particular part of a state would not be counted toward the spending limits, known as per capita caps, a concession to moderate Republicans but perhaps not enough to get the 50 votes needed for passage.

Overall, the new version of the bill made broad concessions to conservative Republicans who had maintained that the initial draft left too much of the health care law in place. McConnell then backfilled the bill with money intended to placate moderates. That jury-rigging of the bill left neither side completely satisfied.

For instance, in a departure from current law, the bill would allow insurers, under certain conditions, to offer health plans that did not comply with standards in the Affordable Care Act. Under that law, insurers sell regulated health plans through a public insurance exchange in each state.

But health care experts worried that such a change would send healthy consumers to low-cost, basic health plans, leaving sick and older consumers to buy more comprehensive health policies at much higher prices. To compensate, Republican leaders added billions of dollars to try to offset rising premiums.

Sen. Ted Cruz, R-Texas, had pushed to allow stripped-down plans, and he called the inclusion of the provision "very encouraging."

"I think failing to get this done would be really catastrophic," Cruz said on the radio station KFYI, "and I don't think any of the Republican senators want to see failure come out of this."

But Paul, an ardent conservative, remained implacably opposed. Another conservative, Sen. Mike Lee of Utah, said he was undecided.

In another change, people who enroll in catastrophic health insurance plans would be eligible for federal tax credits to help pay premiums. Such plans typically have lower premiums and high deductibles. But under the Affordable Care Act, consumers generally cannot use the tax credits for such plans.

"It appears that little has changed at the core of the bill," the Senate Democratic leader, Chuck Schumer of New York, said on the Senate floor. "The Republican Trumpcare bill still slashes Medicaid. The cuts are every bit as draconian as they were in the previous version — a devastating blow to rural hospitals, to Americans in nursing homes, to those struggling with opioid addiction and so many more."

Like the previous bill, it would end the requirement that most Americans have health coverage, and it would make deep cuts to Medicaid, capping payments to states and rolling back its expansion under the Affordable Care Act. Though some Republican senators expressed concern about how the previous bill would affect Medicaid, Senate leaders stuck with the same approach in the new version.

In a notable change, the bill would keep the two taxes imposed by the Affordable Care Act on people with high incomes: the 3.8 percent tax on investment income and the 0.9 percent payroll tax. The taxes apply to individuals with income over $200,000 and couples with income over $250,000.

Both taxes would have been repealed under the previous Senate bill, reducing federal revenue about $231 billion over a decade, according to the congressional Joint Committee on Taxation.

Republicans expect that an analysis of the new bill will be released by the nonpartisan Congressional Budget Office early next week.

McConnell has said he intends to take up the revised bill next week.