Wednesday, June 21, 2017

Health Care Legislation Update

from National Family Voices:

Health Care Legislation - Update
As reported in the May 10 Washington Update, the House approved the American Health Care Act (AHCA, H.R. 1628) on May 4 with only Republican votes. In addition to replacing significant parts of the Affordable Care Act (ACA), that bill would fundamentally restructure and cut the Medicaid program. (See the May 10 Update and the list of articles and resources below.)

Status of Bill. Although Senate Republican leaders have indicated that they would like to hold a vote on their version of the AHCA by the end of June, just before a congressional recess for Independence Day, it remains unclear whether that will happen. Since no Democrats are expected to support the bill, at least 50 of the 52 Republican Senators will have to support it to secure passage. (Vice-President Pence can cast a tie-breaking vote.) Yet several Senators have been expressing concern about the legislation, in part because many of them have not yet been allowed to see it. See Lisa Murkowski, a crucial Senate swing vote, is very frustrated with AHCA (, June 15, 2017).

Due to feedback from governors, health care providers, and other constituents, more Senators are expressing doubts about the Medicaid caps and the loss of consumer protections that would result from the House bill. A bipartisan groups of governors - from Pennsylvania, Ohio, Montana, Nevada, Colorado, Massachusetts, and Louisiana - sent a letter to the Senate Majority and Minority Leaders opposing the House version of the AHCA (S. 1628) - particularly its Medicaid provisions - and urging the Senate to follow principles set out in their letter when crafting its version of the legislation. See Governors from both parties slam House healthcare bill, call for bipartisan Senate approachAnother challenge arose for Senate Republicans when President Trumpreportedly labeled the House bill as "mean."

Yet, rumors suggest that compromises on some of the major issues are getting worked out, as described below, so it is still possible that Majority Leader Mitch McConnell (R-KY) will be able to achieve Senate passage of the bill by the end of next week.

Medicaid ExpansionWithin two years, the House bill would eliminate enhanced matching funds for states to expand Medicaid eligibility to childless adults. A group of Senators whose states have expanded the program, led by Senator Portman (R-OH), have proposed a seven-year phase-out period. Observers are predicting that the Senate bill will include a compromise five-year phase out. This may appease the Senators from "expansion states," but make the bill less palatable to some of the Senators who would like to end the expansion more quickly (e.g., Mike Lee of UT and Rand Paul of KY).

Medicaid Caps - Base Year. More Senators are now focused on the fact that their states - those that did not expand Medicaid and/or have historically low Medicaid spending rates - will end up with less federal funding over the years than other states, since they had relatively low spending in the proposed base year (2016). Rumors indicate that the Senate bill will address this problem by giving states some leeway in determining the time period on which the caps will be based.

Medicaid Caps - Inflation Adjustment. Some Senators are concerned about the severity of the Medicaid cuts that will result from capping federal payments to states. Rumors indicate that a compromise has been developed that may satisfy both ends of the political spectrum: the inflation adjustment may be more generous than the one in the House bill until 2025, but then be made harsher as of 2025. Although some lawmakers may assert that the less generous inflation adjustment can be changed before it goes into effect, it is unlikely this will take place, since changing the law will require Congress to "pay for" any increase in the adjustment either by raising taxes or cutting spending elsewhere in the budget.

Waivers of Essential Health Benefits and Community Rating. The House bill would allow the Department of Health and Human Services to let states waive the ACA's ten Essential Health Benefits (EHBs), and instead establish their own benefit requirements. States would also be allowed to waive the ACA's requirement that individuals not be charged more for insurance because they have a pre-existing condition ("community-rating"). As a result of these changes, it may be very difficult for consumers to find affordable plans that meet their health needs. Moreover, because the prohibition on annual and lifetime coverage limits and the limits on out-of-pocket spending are applicable only to Essential Health Benefits, these protections could be greatly weakened under the House bill.
It has been reported that the Senate bill will allow states to waive EHBs but not community rating. This could still have the effect of increasing premiums for people with pre-existing conditions because they would need plans that cover more services and thus would be more expensive. See If Senate Republican Health Bill Weakens Essential Health Benefits Standards, It Would Harm People with Pre-Existing Conditions (Center for Budget and Policy Priorities, June 12). Allowing states to reduce required benefits would also allow employers to offer insurance plans in which fewer benefits would be subject to protections against annual and lifetime caps and unlimited out-of-pocket expenses. See New changes to essential benefits in GOP health bill could jeopardize protections against catastrophic costs, even for people with job-based coverage, and Allowing states to define "essential health benefits" could weaken ACA protections against catastrophic costs for people with employer coverage nationwide.
Reproductive Health. Senators Lisa Murkowski (R-AK) and Susan Collins (R-ME) have expressed strong reservations about the House-bill provision prohibiting Medicaid reimbursement to Planned Parenthood clinics for one year, which would create financial hardship for many of the clinics. On the other hand, some Senators have indicated that they would object to dropping the House-bill provision prohibiting the use of premium tax credits to purchase any health care plan that covers abortion (except for pregnancies resulting from rape or incest or that threaten the life of the mother). The Senate Parliamentarian has warned the leadership that the latter provision might not comport with the rules of reconciliation, so might be subject to a "point of order" that would strike it from the bill.

Advocacy Efforts. Medicaid advocates around the country have been working to educate Senators and their staffs about how AHCA's Medicaid caps would affect states and Medicaid beneficiaries. Advocates have been conveying the message that any form of cap on federal Medicaid spending would be harmful because it changes the nature of the program, shifting costs to states, providers and beneficiaries, and making it easier for Congress to cut Medicaid spending in the future when they need a "pay-for" for other legislation.

Advocates - joined by Democratic and a couple of Republican Senators - have also been criticizing the secrecy surrounding the Senate bill. Even though it may come to the Floor for a vote next week, no one has seen a complete bill, not even most Republican Senators. To make this point, Senate Democratic Leader Chuck Schumer (D-NY) introduced a bill, the "No Hearing, No Vote Act," that would require hearings on major provisions of a reconciliation bill prior to Floor action. See Dems push to require Senate hearing for ObamaCare repeal vote.

Outlook. Despite challenges, it is quite possible that Senator McConnell will figure out a way to get the votes needed to gain Senate passage. He might employ procedural tactics that would result in a vote before Democrats have had a chance to see the bill's language, thus making it difficult for Democrats to argue against it or offer appropriate amendments. In addition, it is possible he will hold the vote before he is certain that the bill will pass, which would put tremendous last-minute pressure on undecided Senators to vote for the bill.

If the bill passes the Senate, then the House could either accept the Senate's bill, or a House-Senate conference committee would be formed to work out a compromise. If both bills contain the Medicaid caps and cuts, then those provisions likely would remain in any final legislation.
For more information about the AHCA and its impact, see -
Summaries of AHCA:
Analyses of AHCA Impact: 
For more summaries and analyses of the AHCA and related materials, see the May 10 Washington Update.

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