With the blessing of the Trump White House, House Republicans on Monday finally released a plan to repeal and replace Obamacare, a long-anticipated moment in the GOP’s yearslong campaign to upend the Democratic health care law.
But there were warning signs even hours before GOP leaders unveiled the proposal. Four key Senate Republicans in a Monday letter balked at the House plan to repeal the Medicaid expansion after 2020, underscoring how sharply divided the party still remains over how to transform the health care system and accomplish a core campaign promise.
House conservatives, meanwhile, had yet to commit to backing the proposal. GOP leadership, in an olive branch to the far-right, curbed eligibility of the health care tax credits in the final draft, a central component of the plan.
House GOP leaders have also yet to release the official budget score that details the cost of the plan and how many people could lose insurance, a huge issue for moderates who fear blowback in their swing districts.
“We are concerned that any poorly implemented or poorly timed change in the current funding structure in Medicaid could result in a reduction in access to life-saving health care services,” wrote the four Republican senators to Majority Leader Mitch McConnell (R-Ky.). Signatories included Sens. Rob Portman of Ohio, Shelley Moore Capito of West Virginia, Cory Gardner of Colorado and Lisa Murkowski of Alaska—Republicans from states that expanded Medicaid under Obamacare.
Speaker Paul Ryan in a statement Monday night vowed the bill would “drive down costs, encourage competition and give every American access to quality, affordable health insurance.” The statement, notably, did not promise to insure as many Americans as Obamacare — a sore point for some moderate Republicans. GOP leaders, rather, have vowed to ensure access to coverage while emphasizing Obamacare’s “failures.”
The bill, dubbed the “American Health Care Act,” released Monday would repeal some of the biggest piece of Obamacare that have led to more than 20 million people getting insurance coverage since enactment in 2010. The Republican bill preserves Obamacare’s requirement that insurers accept everyone regardless of pre-existing conditions but allows insurance companies to charge a 30 percent surcharge if consumers don’t keep “continuous” insurance coverage.
Republicans would replace Obamacare subsidies with new age-based tax credits ranging from $2,000 to $4,000 to help individuals pay for coverage. The credits would begin phasing out for people who make more than $75,000 for individuals and $150,000 for households. They would disappear completely for individuals who earn more than $215,000, with a cap of $290,000 for joint filers.
The plan unveiled Monday would freeze Medicaid’s expansion in 2020 and phase it out over time. Nationwide, more than 11 million people got Medicaid through the expansion under Obamacare.
Planned Parenthood also would be defunded for one year under the bill — a provision conservatives want but which risks losing the support of moderate Republicans like Murkowski and Sens. Susan Collins of Maine.
Senate Republicans can absorb no more than two defections if they hope to pass the measure under powerful budget procedures that allow for a simple majority vote.
It also includes $100 billion in state grants over a decade. Those funds are designed to help states take care of particularly sick, expensive customers and help stabilize the individual insurance market.
House Republican leadership removed a controversial cap on the tax exemption for employer-sponsored health insurance that was used to pay-for an earlier version of the bill. Many Republicans had balked at the proposal and called it a tax hike on health care. That provision almost certainly would have sparked opposition from business groups, and Democrats had already pilloried it as an unseemly tax on health benefits.
House GOP leadership also made a number of concessions to conservatives in the final bill, hoping to garner support from the far-right — lawmakers who have blasted the plan as “Obamacare lite.”
Freedom Caucus Chairman Mark Meadows (R-N.C.) and RSC Chairman Mark Walker (R-N.C.) in recent weeks came out against the GOP plan to replace Obamacare tax subsides with advanceable refundable health care tax credits. They preferred a tax deduction that would not allow those who don’t pay taxes to receive a check in the mail, calling such “advanceable” credits a “new entitlement.” At the crux of their concern about the draft was the price tag, which they worried would increase the deficit.
House GOP leadership is hoping the income cap on the credits will assuage their concern. The change to the tax credits does not necessarily ensure conservative opposition to the House plan will evaporate.
There was no deal struck between Hill or White House leaders and concerned conservatives in the House Freedom Caucus or the Republican Study Committee. But two conservative sources told POLITICO the right is pleased with the latest changes.
Still, just minutes after Republicans released the plan, libertarian-leaning Rep. Justin Amash panned it on Twitter as “Obamacare 2.0.”
At “first glance, we have concerns,” said Jon Meadows, spokesman for conservative group Freedom Works, which came out against an earlier draft of the House plan.
The current plan also delays repealing many of Obamacare’s taxes until 2018, a year later than previously proposed. That will make up for at least some of the revenue lost by getting rid of the cap on the exclusion for employer-sponsored plans.
Conservatives are likely to loathe the proposed delay in the repeal of many of Obamacare’s tax increases. Among the taxes that will remain on the books for another year are those on prescription and over-the-counter drugs, health savings accounts and tanning services.
Club for Growth president David MacIntosh blasted the plan for keeping the Obamacare taxes for a year longer than before. He argued “getting rid of the exclusion cap, while delaying Obamacare tax repeals is the kind of gimmickry that Democrats used when they were trying to pass it in the first place.”
“There should be no delay in repealing Obamacare taxes,” he said in a statement to POLITICO. “They should be repealed immediately.”
Democrats blasted the GOP bill, saying it would cut Americans off from coverage and would do more to prevent lottery winners from getting Medicaid than enact meaningful health reforms.
Republicans are facing a time crunch to provide insurers with some assurance about what the Obamacare marketplaces are going to look like next year. Health plans are already well into the process of making decisions about prices and products for 2018. If there’s a mass exodus of insurers, the marketplaces could completely collapse, leaving millions of Americans with no access to coverage. That’s a big reason why Republicans are pushing to get the bills through both chambers before they leave town on April 7 for the Easter recess.
“The more we prescribe from here the harder it is to have good policy by Easter,” said Sen. Bill Cassidy (R-La.), who told reporters he learned more about the bill from media reports than from his colleagues in the House.
House Republican sources and a senior administration official said the White House would be putting out a statement in support of the bill. But the administration source added that the statement would intentionally leave some “wiggle room” for negotiations.
“We know this will take some time and we want to give some people room and time to come around to it,” this source said.
Josh Dawsey and Adam Cancryn contributed to this report.
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