Question: How do you repeal Obamacare’s insurance subsidies but make sure millions of Americans don’t lose health coverage in the process?
Answer: Replace them with Obamacare subsidies.
Yep, you read that right. It’s looking more and more likely that Senate Republicans will propose a system of insurance tax credits that are based on not just age, but also income. If that’s the direction they go, they’d be moving further away from conservative ideas for health reform and closer to the system envisioned by President Obama’s health-care law, which they’ve lambasted for years.
Granted, the GOP could propose subsidies that are smaller than those offered by the Affordable Care Act. But conceptually, income-based tax credits are the same tool Obamacare relies on to extend coverage to people without Medicaid or a workplace plan. It’s taxpayer-funded assistance – something Republicans generally rebuff.
So if Republicans view Obamacare as socialized health care – a term Trump used in his 2011 book “Time to Get Tough: Make America Great Again!” -- it’s unclear exactly how a Republican health-care plan would be significantly different in how it ensures people can afford coverage.
Why such a pharisaical move? Senate Republicans are anxious to avoid the very public pitfalls of their House colleagues, who recently passed a bill estimated to strip 24 million people of coverage within a decade – in part, because its subsidies would be based on age and not income. The House bill saves money, yes, and it would allow leaner, cheaper plans overall. But it also means the Americans least able to afford coverage might not get federal help to buy it.
That’s why Republican senators have been discussing a remix of the House bill in which they’d link the subsidies to both age and income. Members told us that was a primary discussion point yesterday, as they emerged from their latest meeting on repealing and replacing the ACA.
“We need a more robust tax credit than what the House had,” said Sen. John Hoeven (R-N.D.) “It needs to be based both on age and income.”
Hoeven said he's working with Sen. John Thune (R-S.D.), the third-ranking Republican, on just such a proposal, which would provide tax credits to earners at even higher income levels than under the ACA. While Obamacare phases out subsidies for those earning 400 percent of the federal poverty level, the senators’ proposal would phase them out at 621 percent.
At this point, it’s important to note the Senate is still far from consensus on its own bill to replace large parts of Obamacare – and members can’t even get started in earnest until next week, when the Congressional Budget Office releases official estimates on the House-passed measure.
Those estimates will delineate clear boundaries (see my explanation here) around how much money the Senate version can spend. Which could in turn put severe limits on significantly boosting subsidies since that’s an expensive endeavor.
Yet if Senate Republicans don’t beef up federal assistance, they risk becoming the bad guys and bearing the blame for reversing Obamacare’s coverage expansions. Moderates appear particularly cognizant of this political reality.
“I am interested in ensuring that we’re maximizing the credit to people who need it the most and that could be more focused on the lower end of the income scale,” Sen. Rob Portman (R-Ohio) told a crowd of reporters yesterday.
Portman was referring to the segment of Americans who earn too much to qualify for Medicaid but don’t get coverage through their workplace – a population that has largely struggled for years to afford insurance. Obamacare provides these folks with subsidies that phase out for individuals earning more than $48,240 (or $98,400 for a family of four).
The ACA has been criticized for its subsidies not being generous enough, and for phasing out too soon. But the subsidies would be much smaller for many people under the House bill. People would get a fixed credit regardless of their income, and it would phase out at $75,000 for an individual. (If you want to go deeper, the Kaiser Family Foundation has an excellent comparison of premiums and tax credits under the ACA versus the American Health Care Act.)
The idea of income-based tax credits being floated in the Senate is likely to dismay conservatives -- including Ted Cruz (R-Tex.) and Mike Lee (R-Utah). But they’ll be up against a larger segment of the GOP conference including Sen. Mike Rounds of South Dakota, who summed things up this way:
“We’ve got to find a way to help Americans pay for their health insurance premiums,” Rounds said.
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--AHH: Bloomberg unearthed a surprising bit of news yesterday: House GOP leadership hasn't yet sent its health-care bill over to the Senate even though the legislation was passed several weeks ago. It's not terribly surprising leaders are holding onto the bill for technical reasons, as I'll explain, but it's a little weird that House rank-and-file didn't seem to know anything about it.
Here's the deal: The reason GOP leadership is still holding onto the bill is because the measure was passed without a final CBO score, which could affect its overall savings figure. Under budget reconciliation rules, the AHCA must save at least $2 billion. Hypothetically, the House might be forced to revote on the bill, if the CBO score expected next week determines the savings fall short.
That's unlikely to happen, but leadership is holding onto the legislation just to be on the safe side. If they were to send the bill over to the Senate -- and then find out the savings aren't enough -- the whole thing would be dead and they'd have to start all over again on a new budget bill designed to avoid a filibuster in the Senate. And The Health 202 doesn't want to even imagine covering that scenario.
The New York Post's op-ed editor poked fun on Twitter:
"And then--get this--they forgot to even send the ObamaCare-repeal bill to the Senate!" pic.twitter.com/eeiB1cku1h— Seth Mandel (@SethAMandel) May 18, 2017
--OOF: Did the Trump administration try to buy support for the GOP health-care bill by offering to give insurers extra subsidies? The Los Angeles Times reported yesterday that Seema Verma, whose Centers for Medicare and Medicaid Services oversees much of the ACA, suggested to insurance industry heads that she'd release the so-called cost-sharing reductions they're seeking (which reimburse insurers for certain discounts they're required to give low-income customers) if they'd back the bill overhauling Obamacare. See my explanation of the CSRs here.
CMS said it's bogus: "The statement about Administrator Verma suggesting that the administration would fund CSR's is absolutely false. What she said at the [America's Health Insurance Plans] meeting in April was that no decisions had been made about CSR's," said CMS spokeswoman Jane Norris.
We think it's all probably going to make Andy Slavitt's head explode. Slavitt (who had Verma's job under the Obama administration) said Republicans would have made it a huge issue during the last administration. The man's got a point.
--OUCH: Planned Parenthood says it's shuttering four clinics in Iowa, as it faces a $2 million cut in public reimbursements from the state. Iowa wants to halt Medicaid funds from going to clinics that provide abortions, so it's replacing some federal funding with state funding over which it holds more control. Gov. Terry Brandstad (R) set the effort in motion last week, when he signed a health and human services appropriations bill calling for Iowa to discontinue a federal Medicaid family-planning network waiver.
Planned Parenthood of the Heartland -- Iowa's largest provider of abortions -- says it's closing clinics in Bettendorf, Burlington, Keokuk and Sioux City that have served more than 14,600 individual patients in the past three years. The clinics were already prohibited from billing Medicaid for abortions, but conservatives argue the funding is fungible.
There was lots of standing and waiting on Capitol Hill yesterday, as health-care reporters waited for stuff to happen.
A bunch of us staked out the Obamacaree meeting that about 15 to 20 senators (I'm told) attended. We might be a little annoying, but hey, at least we made an aisle. Or a gauntlet, depending on how you look at it.
Sen. Ben Sasse circulated a picture yesterday showing standing wasn't for him yesterday, but red shorts were:
You might think that's just a boring tweet, but my colleague Philip Bump writes about how it illustrates the political rift on drug laws. "It’s impossible to ignore the contrast between Sasse’s casual joke about marijuana and the efforts of others in the Senate — and in the Trump Justice Department — to treat drug offenses in the harshest possible terms," Bump writes.
"The drug war has always been overlaid with issues of class and race. A kid slipping out of an expensive wedding to smoke a joint earned a different punishment than did a kid stopped with a joint on a street in Crown Heights. Under the Obama administration, the Department of Justice tried to reduce that discrepancy, including moving away from enforcing mandatory minimum sentences … A week ago, Attorney General Jeff Sessions announced that he would instruct prosecutors to pursue the most severe penalties available in criminal cases — including stiff penalties in drug cases."
--Enough about President Trump this week -- let's talk about his daughter Ivanka. She's expected to play a central role in constructing a paid family-leave policy, which will be in Trump's detailed budget request next week. Two senior White House officials told my colleagues Danielle Paquette and Damian Paletta that the budget will seek funds for the creation of a program to grant parents six weeks of paid leave after the birth or adoption of a child.
Mandatory paid leave in the United States -- which is virtually the only developed country without such a requirement for employers -- has been a big-ticket item for Ivanka, who convinced her father to propose it during his presidential campaign last fall.
--Ivanka's been invited to meet with several House Democrats to chat about "women's health issues including access to affordable contraception," according to a letter sent yesterday by Reps. Judy Chu (Calif.), Diana DeGette (Colo.), Louise M. Slaughter (N.Y.) and others. The Democratic women are indignant that Ivanka's said nothing about the GOP health-care bill and how it would give states a pathway to opt out of some insurance coverage requirements.
"Given your stated passion about women’s issues and empowerment, we found your silence during the House passage of the American Health Care Act (AHCA) surprising,” they wrote. “AHCA is a disastrous bill for women and their families, threatening access to pregnancy care, maternal and newborn services, breast cancer screenings, and contraception...Given your influence over these issues in the White House, we respectfully request an in-person meeting."
If Ivanka accepts their invitation to meet by May 26, she's not likely to tweet about it or even talk about it at all. She met with Planned Parenthood President Cecile Richards, but that meeting stayed under the radar until Politico reported it last month.
See Colombian President Juan Manuel Santos, who was visiting the White House yesterday, say the war on drugs isn't over:
Here's what you need to know about Trump's overseas trip, which starts today:
And Stephen Colbert says Trump has the "most special" counsel: