Here’s Why Tweaks and Fixes to the Senate Health Bill May Not Be Enough

Here’s Why Tweaks and Fixes to the Senate Health Bill May Not Be Enough


Congress is departing for the July 4th holiday with no signs that the Senate Republicans and the White House are close to a final deal to repeal and replace the Affordable Care Act.

In a desperate bid to revive their legislation after postponing scheduled votes earlier in the week, McConnell and other Senate GOP leaders confirmed yesterday they were considering proposals to preserve one of the Obamacare law’s taxes on high-income people to free up $172 billion for Medicaid.

Republican leaders are also providing more money to combat the opioid epidemic and a new incentive for people to establish tax-free savings accounts for medical expenses.

Senate GOP leaders and the Trump administration have agreed to include $45 billion for an opioid treatment fund over the coming decade instead of $2 billion originally proposed.

These desperate measures from Senate Republicans to shore up their health plan to repeal and replace the Affordable Care Act come on the heels of a new analysis from the Congressional Budget Office on Thursday that shows the plan results in 35 percent lower spending on Medicaid in the second full decade of operation.

The brief three-page report which had been sought by Senate Finance Committee Democrats offers insight into the longer-term effects of the highly controversial Republican health care plan that has come under sharp criticism from Democrats and nearly a dozen conservative and moderate Republicans who hold the fate of the legislation in their hands.

Related: Why State Governors Are Freaking Out About the GOP Health Plan

On Monday, the non-partisan CBO issued their first report on the Senate plan forecasting that 22 million Americans would lose their health insurance coverage over the coming decade, including 15 million who are currently on expanded or traditional Medicaid for low-income or disabled Americans. The report said that Medicaid spending under the plan would decline $772 billion or 26 percent by 2026.

But looking further into the future yesterday, the CBO concluded, “A large gap would grow between Medicaid spending under current law and under this bill,” and that the gap would widen to the point that Medicaid spending in 2036 would be more than a third lower than it would otherwise be under the current Obamacare law.

The follow-up analysis doesn’t indicate how much more than the $772 billion would be cut from Medicaid in the second decade, nor does it estimate how many more people would be dropped from the rolls by then.

“Beyond the coming decade . . .  projecting federal spending on Medicaid becomes increasingly difficult because of the considerable uncertainties involved,” CBO said in its latest report. “A wide range of changes could occur—in people’s health, in states’ decisions about Medicaid eligibility and covered benefits, and in the delivery of medical care—that are almost impossible to predict but that could nevertheless have a significant effect on federal spending on Medicaid.”

Related: Here Are Five Reasons Why the GOP’s Health Bill is Doomed

However, some budget experts say that enrollment would continue to drop sharply in the second decade and that hundreds of billions of dollars more in savings would be extracted.

“That is going to cause a lot of harm, and that’s one of my biggest concerns about the bill,” Sen. Susan Collins (R-Maine), one of the handful of GOP holdouts on the bill, told CNN after the release of the latest CBO report.

However, some Republicans dismissed the latest report as highly speculative, noting that even CBO concedes it’s difficult to forecast so far into the future with any accuracy.

Under CBO’s extended baseline, overall Medicaid spending would grow 5.1 percent per year during the coming two decades, partly because prices for medical services would increase. However, if the Senate Republicans’ Better Care Reconciliation Act were approved, such spending would increase at a rate of 1.9 percent per year through 2026 and about 3.5 percent per year in the decade after that.

Related: After CBO’s Score, Passing the Senate Health Bill Is a Long, Longshot

Medicaid is a joint federal-state government health care program that covers 72.5 million low-income adults, children, disabled persons and seniors who are not eligible for Medicare. Under current law, CBO projects the federal government will spend nearly $5.2 trillion over the next ten years on Medicaid.

While President Trump and congressional Republican leaders initially targeted Obamacare’s government-subsidized individual health insurance plans for a major overhaul or elimination, their plans gradually evolved to include wholesale changes in the costly Medicaid program.

If Senate Majority Leader Mitch McConnell of Kentucky and other Republican leaders somehow manage to pass health care legislation this summer, it would dramatically change Medicaid from an open-ended entitlement program to a per-capita-cap or block grant program in which the federal government contributes a fixed share of the cost.

Related: Senate Health Bill Would Drive Coverage Down by 22 Million: CBO

Under the new approach, the federal government’s contribution would be pegged to the consumer price index for urban consumers, a less generous COLA than the current one pegged to the medical inflation rate.

The Senate bill would also gradually phase out the expanded Medicaid coverage under Obamacare for low-income, childless, able-bodied adults in 31 states and the District of Columbia,

According to the CBO and other budget analysts, the changes being sought in both the Senate and House-passed bills would force the states to make tough decisions to tighten eligibility, reduce benefits, cut payments to doctors and hospitals and other steps essential to providing health care coverage with gradually diminished resources.

Moderate Republicans from states with expanded Medicaid, including Collins, Shelley Moore Capito of West Virginia, Lisa Murkowski of Alaska and Rob Portman of Ohio, are fighting the deep cuts in Medicaid, and are threatening to torpedo the legislation unless significant changes are made.