May 5, 2017

AHCA's future in Senate uncertain as GOP senators eye their own plan

Daily Briefing

The House-approved American Health Care Act (AHCA) now heads to the Senate, where Senate Republicans have signaled they could spend the next few weeks crafting their own replacement.

Republican lawmakers are looking to pass legislation to repeal and replace the Affordable Care Act through the budget reconciliation process, which allows certain bills related to spending and revenue to be passed in the Senate by a simple majority, without being subject to a filibuster.

The process, however, has fairly strict rules that are interpreted by the Senate parliamentarian, the New York Times reports.

Further complicating matters is that Republicans hold only a 52-vote majority in the Senate, meaning they can afford to lose only two Republican votes—with Vice President Mike Pence casting a tie-breaking vote—to pass a bill with no Democratic support. But some Republican senators—including Sens. Roy Blunt (R-Mo.), Jeff Flake (R-Ariz.), and Orrin Hatch (R-Utah)—on Thursday signaled the AHCA is likely to go through significant changes in the Senate to gain enough support for passage. The bill would then need to be re-approved by the House before it could go to President Trump for a signature.

Senate Committee on Health, Education, Labor and Pensions Chair Lamar Alexander (R-Tenn.) after the House's vote said, "We're writing a Senate bill and not passing the House bill." He added, "We'll take whatever good ideas we find there that meet our goals."

What's on the Senate negotiating table

According to Vox, some senators have already started work on AHCA amendments, though no details have been publicly released.

Sen. John Cornyn (R-Texas) said that GOP senators met Thursday morning with Senate Majority Leader Mitch McConnell (R-Ky.) to begin outlining their priorities for the legislation, which industry observers say are likely to include changes to its provisions on Medicaid and the Affordable Care Act's essential health benefits.

Medicaid provisions

The House-approved AHCA would shift Medicaid to a per capita allotment model. It also would allow states that expand Medicaid under the ACA by Jan. 1, 2020 to let individuals enrolled under the expansion maintain coverage—but only as long as those individuals remained continuously eligible for Medicaid.

Some Senate Republicans representing states that have expanded Medicaid under the ACA have expressed concerns about this approach. Sen. Rob Portman (R-Ohio) said, "I've already made clear that I don't support the House bill as currently constructed because I continue to have concerns that this bill does not do enough to protect Ohio's Medicaid expansion population."

Health care reform beyond the ACA

During the AHCA debate in the House, Sens. Lisa Murkowski (R-Alaska), Cory Gardner (R-Colo.), and Shelley Moore Capito (R-W. Va.) all expressed similar concerns about the effects the AHCA could have on their constituents, according to the New York Times.

But another wing of GOP senators—including Sens. Mike Lee (R-Utah) and Rand Paul (R-Ky.)—have said the proposed cuts to Medicaid do not go far enough, Vox reports.

Pre-existing conditions

Another key issue for the Senate will be how the bill handles people with pre-existing conditions. The AHCA would permit states to apply for waivers to allow insurers to impose health status underwriting on individuals who do not maintain continuous insurance coverage; under those waivers, analysts say individuals with pre-existing conditions could face significantly higher premiums. Several industry experts have said the House's last-minute amendment to provide an additional $8 billion to help cover such individuals would not be enough to cover their costs.

Rep. Fred Upton (R-Mich.), who crafted the amendment, said it would be impossible to tell if the funding is enough without an as-yet-unreleased Congressional Budget Office score, and some Senate Republicans are uncertain that Upton's approach will be sufficient, Vox reports. For instance, Sen. Susan Collins (R-Maine) said, "It appears to be unclear how people with preexisting conditions would be treated under the bill," adding, "That's a major concern of mine."

Other potential changes

Sen. Lindsey Graham (R-S.C.) also said that senators "still have differences on essential benefits," Vox reports. Under the House-approved bill, states would be able to apply for a waiver to eliminate those ACA requirements, which specify the services that all insurers must cover.  

Further, according to Vox, some Senate GOP aides and lobbyists have said senators are likely to re-examine the AHCA's structure for subsidies to help consumers purchase coverage. The House-approved AHCA would replace the ACA's income-based premium subsidies with refundable age-based tax credits that phase out for individuals with annual incomes over $75,000.

According to Axios' "Vitals," Alexander also identified as key priorities helping consumers who will not have a coverage option in the ACA's exchanges next year and lowering premiums.

Next steps

According to Vox, Republican Senators have competing ideas about the bill's future timeline.

Sen. Richard Burr (R-N.C.) said he expects Senate Republicans could approve a health reform bill in "three to four weeks." Both he and Sen. Chuck Grassley (R-Iowa) said they felt the bill should bypass the committee process and go straight to the floor.

But other senators have criticized the House's methods for fast-tracking the bill and suggested the Senate should move more deliberately. For instance, Sen. Lindsey Graham (R-S.C.) shortly after the vote said, "Any bill that has been posted less than 24 hours, going to be debated three or four hours, not scored?... Needs to be viewed with suspicion."

A further wrinkle is that, according to Politico, House Republican leaders hope to move on by the end of May to passing a tax reform bill via the reconciliation process, and under the GOP's interpretation of Senate rules related to reconciliation, they would not then be able to return to pass the health care bill.

But several senators have stressed that the Senate could not vote on the bill without an updated Congressional Budget Score, which according to Politico's "Pulse," would mean Senate debate on the bill would be unlikely to start before June.

Ultimately, any changes the Senate makes would need to go back to the House for approval, and House Freedom Caucus members on Thursday suggested they might not back the Senate's changes. According to the Washington Post's "PowerPost," House Freedom Caucus Chair Mark Meadows (R-N.C.) on Thursday said, "Obviously, the upper chamber has their own personalities and their own agendas," He added, "Certainly, it's their agenda and not mine."

Rep. Dave Brat (R-Va.), a Freedom Caucus member, signaled stronger opposition to Senate changes, saying, "If they revise it, there's no way."

However, President Trump in a speech shortly after the House vote signaled confidence a final agreement could be reached. "I went through two years of campaigning and I'm telling you, no matter where I went, people were suffering so badly with the ravages of Obamacare," Trump said. "We are going to get this passed through the Senate. I am so confident" (Scott, Vox, 5/4; Abutaleb/Morgan, Reuters, 5/4; Sullivan et al., "PowerPost," Washington Post, 5/4; Flegenheimer, New York Times, 5/4; Prokop, Vox, 5/2; Bade et al., Politico, 4/30; Diamond, "Pulse," Politico, 5/5; Stein, Vox, 5/4; Nather, "Vitals," Axios, 5/5).

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Stuart Clark, Managing Director

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