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Week Ending May 12, 2017

Despite Criticism of House Health Care Bill, Senate Bill will be Similar

This week, Senate Majority Leader Mitch McConnell (R-KY) formally designated 13 Republican Senators to serve on a working group to draft health care legislation, following passage of a bill (H.R. 1628) in the House last week that repeals the core of the Affordable Care Act (ACA) and cuts Medicaid.  McConnell was widely criticized for failing to include a single woman on the working group.

While many Senate Republicans have been critical of the House bill, this criticism has centered on a limited number of issues including provisions that eliminate protections for pre-existing conditions and provisions to phase out the ACA’s Medicaid expansion.  As a result, we expect the Senate bill to be similar to the House bill.  Unfortunately, none of the Republican moderates who are concerned with the phase-out of the Medicaid expansion have raised objections to the structural changes that the House bill makes to the Medicaid program.  Under the House bill, federal Medicaid payments to the states would no longer be a specified share of state costs.  Instead, payments would be capped on a per person basis with limits on how much the cap could grow each year.  As a result, federal payments to the states would be cut each year by larger and larger amounts, compared with current law. 

Rules for bills considered under reconciliation procedures require that the Senate bill not exceed the cost of the House bill.  Therefore, any improvements that would increase the cost of the Senate bill, such as delaying the phase-out of the Medicaid expansion, would require other changes to make up for the additional spending.  Some Senate Republicans have said that taxing workers on their health care benefits should be an option on the table to pay for any improvements to the bill.  Speeding up the implementation of the 40% excise tax on high cost health plans would be another option.  In the House, Speaker Paul Ryan (R-WI) had initially included a provision in his bill that would tax workers on their health benefits, but later took it out due to objections by a number of House Republicans.    

While Leader McConnell has expressed a desire to move a bill quickly to the Senate floor, it appears that they are aiming to complete a floor vote by the July 4 recess.

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