The latest iteration of the Senate's healthcare reform bill shows Majority Leader Mitch McConnell trying a tricky balancing act to win over the most conservative members of his caucus while retaining moderates who want to preserve some elements of Obamacare.
The legislation, unveiled Thursday, is being teed up by McConnell for a vote next week.
The plan would let insurers sell plans that don't meet Obamacare requirements. Because that provision would likely prompt healthy people to opt for cheaper, no-frills plans and drive up the cost of more comprehensive coverage, the legislation also would create a fund to make payments to help insurers cover high-risk individuals who need Obamacare-eligible plans.
To qualify for the right to sell the stripped-down funds, an insurer would need to offer plans that meet the requirements of the Obamacare, formally known as the Affordable Care Act.
Another provision would allow individuals to use tax credits to purchase high-deductible catastrophic health insurance.
The bill was being discussed in a closed-door meeting with Senate Republicans Thursday morning but an outline of the package was obtained by reporters.
The provision allowing insurers to offer less comprehensive insurance plans is a riff on an idea floated by conservatives Sen. Ted Cruz, R-Texas, and Sen. Mike Lee, R-Utah. Their support is crucial because McConnell, of Kentucky, can lose the support of only two Republicans and still pass the bill without any support from Democrats.
Another new provision would let individuals use health savings accounts to pay their monthly premiums, an expansion of their current use for covering out-of-pocket costs.
To address criticism that the rollback of the 2010 Affordable Care Act is a tax cut for the rich at the expense of the poor and middle class, the legislation retains Obamacare's 3.8% net investment income tax and a 0.9% Medicare payroll tax for individuals with income above $200,000 and couples with income above $250,000. It also would not change a remuneration tax on executive compensation for certain health insurance executives.
To keep moderates from the fleeing the bill, $70 billion is being added to a state stability fund, on top of the $112 billion the Senate's original draft included to help lower premiums. It would also provide $45 billion for substance abuse treatment and recovery.
To soften the hurt hospital finances would feel from rollbacks in Obamacare's Medicaid expansion, the new draft would base disproportionate share payments to safety net hospitals on the number of uninsured people they treat rather than simply the number of Medicaid enrollees they treat.
Still, hospital shares were generally down after details of the plan became available, including Quorum Health Corp. (QHC - Get Report) , HCA Healthcare Inc. (HCA - Get Report) , Community Health Systems (CYH - Get Report) and Tenet Healthcare Corp. (THC - Get Report) . At least one hospital stock, LifePoint Health Inc (LPNT was up.
To soften the blow to states due to the Medicaid rollback, states could choose to allow their Medicaid expansion population to be covered an expanded Medicaid block grant—the big question is how big that block grant is and how many of the expansion population could actually get coverage under the block grant.
McConnell has signaled that inclusion of the Cruz/Lee provision on stripped-down insurance plans is not a forgone conclusion. The Congressional Budget Office has been reviewing a version that includes the proposal and one that doesn't. The CBO's estimates on how the provision will affect the federal budget deficit and the ranks of the uninsured will be critical in determining whether Republicans will retain the measure in the bill.
Capitol Hill vote counters say McConnell still faces an uphill battle ensuring enough votes to pass the bill.
Sen. Rand Paul, R-Ky., told reporters Wednesday that the latest version was worse than the original and that he would not vote for it.
Moderate Republicans still insist the bill needs major overhauls. Sen. Susan Collins, R-Maine, Shelley Moore Capito, R-W.V., Rob Portman, R-Ohio, Jerry Moran, R-Kan., Lisa Murkowski, R-Alaska, and Dean Heller, R-Nev., all have said the rollback of Medicaid's expansion is a move that would lead them to oppose the entire package.