Senate Republicans Release Draft of Their Health Plan

Last Thursday, Senate Republicans released their proposal to replace Obamacare. The plan comes after months of highly-secretive, behind-closed-door meetings. Senate Majority Leader Mitch McConnell has previously indicated he would like the Senate to vote on the measure next week ahead of the Fourth of July recess, but it is unclear if they will have the votes to pass the Senate with only 50 votes plus the support of Vice President Mike Pence.

Provisions of the proposed measure include:

  • The plan would keep the current cost-sharing subsidy payments in place through 2019 and retains the current assistance formula basing aid on income and the cost of an insurance plan. However, the tax credits are slightly less generous, by eliminating subsidies at 350 percent of poverty level – as opposed to 400 percent with Obamacare. It also bases the subsidies off of the bronze level plan, which has higher cost-sharing, rather than the silver-level plan.
  • The measure would phase out Obamacare‚Äôs expansion of Medicaid over three years, starting in 2021. The bill would cap federal spending on the Medicaid program using the per-capita cap – which is similar to the measure that passed the House. However, it applies to a more stringent inflationary measure, using overall inflation, rather than medical inflation, beginning in 2025.
    The proposal provides an additional $50 billion over four years to stabilize insurance exchanges, relying on a mechanism Republicans have long criticized as a way to keep insurers in the marketplaces.
  • The draft bill includes $62 billion allocated over eight years to a state innovation fund for coverage for high-risk patients, reinsurance and other items.
  • The plan also includes $15 billion a year in market-stabilizing funds over the next two years and $10 billion a year in 2020 and 2021.
  • The Senate version, as with its House counterpart, repeals the individual and employer mandates.
  • The Senate measure sunsets the essential benefit requirements beginning in 2020.

Republicans worked with the Senate Parliamentarian to ensure that the bill complied with the Byrd Rule, which allows the measure to pass under the reconciliation process and requires only a 50 vote threshold. The Byrd Rule requires reconciliation legislation only to include budget-related provisions and cannot include language that has limited or no fiscal impact. The reconciliation process also opens Republican Senators up to having to vote on an unlimited number of amendments, which Democrats will offer aimed at making Republicans choose between higher benefits between the poor and working poor, or tax cuts.

A Senate-passed bill would go to the House, which would have the choice of approving the Senate version or negotiating a compromise version. If they choose to renegotiate, it would have to pass both chambers again before sending it to President Trump for his signature.