U.S. Senate Republicans unveil new healthcare bill amid deep divisions

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WASHINGTON (Reuters) – Senate Republican leaders, aiming to salvage efforts backed by President Donald Trump to dismantle the Obamacare law, on Thursday unveiled revised healthcare legislation that lets insurers sell bare-bones policies and retains key taxes on the wealthy.
U.S. Senate Majority Leader Mitch McConnell, known as a skillful tactician, released the updated legislation in a bid to unite disparate Republican factions and make good on his party’s seven-year mission to gut Democratic former President Barack Obama’s signature legislative achievement.
The proposal replaces an earlier one that deeply divided Trump’s fellow Republicans, who control the Senate, drawing opposition from both moderates and hard-line conservatives. McConnell has planned for a vote on the new bill next week.
The revised plan included conservative Senator Ted Cruz’s proposal to let insurers offer stripped-down, low-cost healthcare plans that do not comply with Obamacare regulations to cover certain health benefits. Those benefits include maternity and newborn care, mental health services and addiction treatment, outpatient care, hospitalization, emergency room visits and prescription drugs.
Insurer groups, including the national Blue Cross Blue Shield Association, have derided these “skinny plans,” saying they would raise insurance premiums, destabilize the individual insurance market and undermine protections for pre-existing medical conditions.
The legislation retained two taxes on the wealthy that helped pay for the Obamacare law. They are: a 3.8 percent tax on net investment income for individuals earning more than $200,000 and couples earning more than $250,000; and an 0.9 percent surtax for the Medicare insurance program for the elderly on people with those incomes.
The bill retained the previous draft bill’s phaseout of the Obamacare expansion of the Medicaid government health insurance program for the poor and disabled and sharp cuts to federal Medicaid spending beginning in 2025. Like the earlier version, it would repeal certain Obamacare taxes, end a penalty on individuals who do not obtain insurance and overhaul Obamacare subsidies to help people buy insurance with tax credits.
Moderate Republicans had been hoping to see a reduction in Medicaid cuts in the revised version.
While companies can generally deduct employee salaries as a business expense, Obamacare capped the tax deductions on health insurance executive salaries at $500,000, and the new Senate bill will keep that cap.
Hospital and insurer groups have spoken out against the Senate Republican approach, particularly proposed Medicaid cuts. The cuts would result in lower revenues for hospitals like Community Health Systems Inc and Medicaid insurance specialists like Molina Healthcare and Centene Corp.
The Affordable Care Act, dubbed Obamacare, expanded health insurance coverage to some 20 million people, in large part through expanding Medicaid.
The bill would allow people to use health savings accounts to help pay for insurance premiums and contains an additional $70 billion to help low-income insurance holders cover out-of-pocket medical expenses. It also includes $45 billion for fighting the opioid addiction epidemic hitting large parts of the nation.
U.S. Senator Ted Cruz (R-TX) (C) is surrounded by reporters as he arrives for a meeting of the Senate Republican caucus for an expected unveiling of Senate Republicans’ revamped proposal to replace Obamacare health care legislation at the U.S. Capitol in Washington, U.S. July 13, 2017.
Jonathan Ernst
Repealing and replacing Obamacare, which Republicans fault as a costly government intrusion into the healthcare system, was a top campaign promise for Trump, who was monitoring the Senate developments during his visit to France.
McConnell has little room for error, as even three “no” votes among Republican senators would sink the legislation in the 100-seat Senate because Democrats are united against it. Republicans have a 52-48 majority, with Vice President Mike Pence able to cast a potential tie-breaking vote.
But 10 Republican senators had voiced opposition to the previous version of the bill, and McConnell faced a difficult task in coming up with a plan that could unite party moderates and hard-line conservatives.
Alternative Plan
Complicating matters further, two Republican senators, Lindsey Graham and Bill Cassidy, offered an alternative healthcare proposal minutes before McConnell unveiled his new plan. It would redirect much of Obamacare’s federal funding for health insurance to states.
The fact that Republicans still lack consensus on what to do with Obamacare after calling for its demise since Congress passed it in 2010 with only Democratic votes shows that it is no sure thing that Trump’s party will be able to get the job done.
The House of Representatives on May 4 passed its own version of healthcare legislation.
Healthcare is Trump’s first major legislative initiative, and failure would call into question his party’s ability to govern despite controlling both chambers of Congress and the White House.
Trump said in an interview with the Christian Broadcasting Network on Wednesday he would be “very angry” if he does not get a bill on his desk to repeal and replace the 2010 Affordable Care Act, dubbed Obamacare. Trump put pressure on McConnell, saying he “has to pull it off” in the Senate.
Moderate Republican senators have been uneasy about a forecast that millions of people would lose medical insurance under the legislation, while hard-line conservatives say it leaves too much of Obamacare intact.
The nonpartisan Congressional Budget Office (CBO) forecast that the previous Senate healthcare bill would increase the number of people without health insurance by 22 million by 2026.
While ending a fine on people who decline to obtain insurance, the Senate bill would force people who let their coverage lapse to wait six months before coverage could resume. The provision is intended to stop people from waiting until getting ill to buy health insurance because insurers need to have lots of healthy people obtaining policies to offset the expense of care for sick people.

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