Like the American Health Care Act that passed the House in May, the Senate bill represents a major revision to the Affordable Care Act, rather than a wholesale repeal. A premise of both bills is that the ACA, also known as Obamacare, is falling apart, and Americans are eager for relief.
“Obamacare is dead, and we’re putting a plan out today that is going to be negotiated,” President Trump said shortly after Senate Majority Leader Mitch McConnell briefed the 52-member GOP caucus on the tightly guarded proposal. Political insiders assume McConnell will allow amendments to provide skeptical senators with cover for eventual votes in favor of the measure.
The Senate bill mirrors the House proposal in eliminating Obamacare’s employer and individual insurance mandates and most of the tax increases the ACA imposed to pay for new programs.
Both proposals seek an overhaul of Medicaid funding that would allow states to institute work requirements and end the program’s status as an open-ended entitlement. The rollback of Medicare would be phased in over several years. The Senate version would begin a three-year phaseout of Medicaid’s expansion in 2020. The House version would freeze the program’s expansion in 2020, meaning states would then have to make up the difference in costs for adding enrollees.
Once the Medicaid expansion is curbed, the Republican proposals curtail the program by tying the amount it can spend to an inflation index that analysts said would significantly slow the rate of funding growth.
Pre-existing conditions are protected in the Senate bill, which does not allow waivers that permit insurance companies to charge higher rates to sick people. But it does allow states to waive the federal mandate on what insurers must cover, known as the essential health benefits. This would allow insurers to offer less comprehensive policies, and those with pre-existing conditions might not have all of their treatments covered.
The Senate bill targets abortion coverage by prohibiting the use of tax credits to buy insurance plans that cover the procedure, and it would ban funds from going to Planned Parenthood for one year.
The ACA imposed a number of taxes on wealthy individuals and some businesses to help fund health insurance subsidies, and both the Senate and the House would repeal many of those taxes. Obamacare’s subsidies are benchmarked to prevailing premiums, guaranteeing that as premiums rise in a locale, so too will the subsidies for people who live there. The Senate’s health plan resets the benchmark to cover a smaller percentage of expected health costs and increases the percentage of income someone pays for a benchmark plan before it is deemed unaffordable and additional subsidies kick in.
Unlike the House bill, the Senate proposal funds cost-sharing payments to insurers to help stabilize the individual insurance market.
With Senate Democrats united in opposition to a repeal of the ACA, McConnell can withstand just two “no” votes on the Better Care Reconciliation Act — Vice President Mike Pence could break a 50-50 tie. A few conservative senators complained that the bill doesn’t go far enough in dismantling Obamacare, while some moderates expressed discomfort with the rollback of Medicaid and a provision to withhold funding for Planned Parenthood.
Business interests lobbying to influence the vote include the National Retail Federation, which asserted in a statement that the Senate plan would strengthen the competition-driven private insurance market. “Retailers welcome this step forward in the process to repeal many of the most onerous mandates in Obamacare,” the NRF said.
On the other hand, hospitals panned the bill’s cuts to Medicaid. “Medicaid cuts of this magnitude are unsustainable and will increase costs to individuals with private insurance,” said Rick Pollack, chief executive officer of the American Hospital Association.