Senate Majority Leader Mitch McConnell (R-KY) pulled the Better Care Reconciliation Act from a vote during the Republican weekly luncheon last Tuesday, June 27 concerned that the bill would go down to defeat. Once that happened he intensified rounds of negotiations looking at nearly $200 billion in projected savings to try and buy enough support to get to 50 Republican votes. The week was bookended by two CBO projections that highlighted the cuts to Medicaid and the President suggested the Congress should just repeal the entire law and not bother with a replacement until later.
Senator McConnell received a blow Monday afternoon when the Congressional Budget Office released their analysis of the Better Care Reconciliation Act that projected that 22 million people would lose health insurance over ten years (15 million next year), would cut Medicaid by $770 billion and cut the deficit by $321 billion over ten years meaning it saved $202 billion more than the House bill.
The Senate must save as much as the House bill or be in violation of the reconciliation rules. That $200 billion extra gives McConnell some ability to spend on certain features to entice the votes of some Senators–especially those more moderate Republicans who feel the bill goes too far.
One area where he feels he can go is more money to provide treatment for people addicted to opioids. The bill now includes an additional $45 billion over ten years for opioids relief. That is up from the $2 billion over two years. This is designed to appeal to a core group of Republicans especially Senator Rob Portman (R-OH), Susan Collins (R-ME) and Shelly Moore-Capito (R-WV). This would all happen while the Senate bill keeps its per capita cap/block grant provisions in Medicaid which yields $770 billion in ten years of cuts (or sometimes labeled savings or reductions in the rate of growth by supporters of the cuts).
It is unclear if that $45 billion alone is enough to overcome the opposition to the Medicaid cuts. Many Republicans and Democrats were still expressing concerns that drug treatment accompanied by the Medicaid cuts would not work. Treatment experts say that drug treatment without health care coverage will not be effective.
Ohio’s Republican Governor John Kasich was quoted in Politico as saying, “That’s like spitting in the ocean. Senator Capito said on CNN, “To me, it goes hand-in hand. You wont access the [substance abuse] treatment without the [health insurance] coverage, whether from the exchanges or Medicaid.” In the same Politico article New Jersey Governor Chris Christie said, “When I expanded Medicaid eligibility in New Jersey by Executive Order in 2013, it created a sea change in the availability of drug treatment for the poor in New Jersey. In 2016, 14,357 Medicaid recipients are receiving drug addiction treatment. This represents a five-fold increase over 2013.
Both Governor Christie and former Congressman Patrick Kennedy (D-RI) serve on a new presidential commission to make recommendations on opioids, Kennedy said that “We can’t bury our heads in the sand with budget deals or health care reform and think that somehow everything is going to be OK.
The Better Care Act, like the House bill creates a per capita cap and a state option to take Medicaid as a block grant. The cap is based on a formula of five subcategories of patients including children, the elderly and disabled. Each year that formula would be adjusted by an inflation factor. That in turn becomes the maximum amount a state can draw down in a year and if they spend more it would be up to the state to make up the difference or cut rates, services, eligibility or all three. The Senate bill is more severe than the House version because its per capita cap is based on a more conservative urban inflation rate.
As if to reinforce that CBO, in response to a request by Finance Committee Ranking Member Ron Wyden (D-OR) issued an analysis of Medicaid twenty years from now. That Longer-Term Effects of the Better Care Reconciliation Act of 2017 on Medicaid Spending found that Medicaid spending reductions under the Better Care Reconciliation Act would increase to about 35 percent in 2036 compared to the 26 percent cuts in the first ten years.
To send a later of protest to your two United States Senators and Member of Congress go to the new CWLA Action Center type in your zip code and pull up a draft letter ready to send.
Key Negotiation Points
Subsidies and Premium Support and Taxes
The subsidies to purchasers are replaced by tax credits and McConnell is attempting to adjust the credits to protect poorer income purchasers since the CBO calculates the bill as having a disproportionate impact on lower income and older adults. In regard to taxes the bill has also been slammed as a tax cut for the rich with a total repeal of the various taxes in the ACA. These tax increases generally hit only higher income individuals and families making more than $200,000 a year. Some of these taxes are also targeted to investor income. McConnell has been raising the possibility of maintaining some of the taxes including the 3.2 percent tax on higher income investors. That would allow more funds to address bill shortfalls but keeping the taxes is raising concerns on the right.
The Senate bill continues the requirement that people cannot be denied insurance because they have a pre-existing condition. Shortly after the bill was introduced it was recognized that the way the bill was written meant that any person could wait until they were ill before buying a policy. That resulted in amendments to the Senate bill to require a six-month waiting period before coverage kicked-in. It is unclear where this will go since many health care advocates have said a six-month wait could be critical especially for certain illnesses such as cancer.
The bill provided $2 billion over two years for drug treatment targeted to opioids. By week’s end that number had gotten bumped up to $45 billion over ten years. The question is whether such increases while also cutting Medicaid will be sufficient enough to win over Senators.
More conservative members led by Senator Ted Cruz (R-TX) and Senator Pat Toomey (R-PA) are pushing back against many the items McConnell is adding in to get moderates on board. One way they may be pacified is if the essential benefits can be weakening or stripped out. There is some state opt out provisions but one of the big questions is how much of these insurance protections can be stripped out to satisfy conservatives. Weakening insurance standards may be in violation of the reconciliation process because they would not have a direct impact on federal deficits.
The Senate is off, so there is still this week for McConnell to get to 50 votes (with the Vice President breaking the tie). There are few days left in July so if Senator McConnell can’t get to 50 he may have to push it to the side or cancel part of the August break as a growing number of House and Senate conservatives are pushing.