Senate Republican leaders released a healthcare bill Thursday that overhauls Medicaid, scraps most of Obamacare's taxes and alters tax credits available to individuals to purchase health insurance.
The Senate discussion draft unveiled Thursday is the chamber's response to the American Health Care Act, which passed the House last month. Like the House bill, the Senate version guts Obamacare's controversial individual and employer mandates.
The most popular provisions of Obamacare are kept in place in the bill, including language allowing children to stay on a parent's health insurance plan until age 26 and preserving coverage for people with pre-existing illnesses.
On Medicaid, expansion funds would begin to be pulled back in 2021 in states that expanded the program, and the bill would bring the federal share of funding back to pre-Obamacare levels by 2024. It provides additional funding for states to care for children with disabilities and for them to pay for substance abuse and mental health treatment.
Like the House bill, the fundamental structure of Medicaid would change beginning in 2020 from an open-ended funding structure to allowing states to choose between a per-capita cap or a block grant, which fixes the amount the federal government contributes each year. States would also have the option to implement a work requirement for Medicaid beneficiaries, with exemptions for pregnant women, older adults and disabled people.
The Senate bill differs from the House bill through language aimed at stabilizing the health insurance exchanges by allocating $15 billion per year in 2018 and 2019, and then $10 billion each year in 2020 and 2021. It also would continue Obamacare's cost-sharing reduction subsidies, which go to insurers to help them lower out-of-pocket medical expenses for patients, through 2019.
Some have warned that provision may not be able to survive on the reconciliation bill, and for jurisdictional reasons among Senate committees, may instead have to be passed as part of an appropriations bill.
It beefs up a provision in Obamacare that allows states to structure their own healthcare plans through a waiver and provides $62 billion over eight years to encourage states to help residents with low incomes with high-cost medical needs buy health insurance.
Similar to the House version, the bill encourages the use of health savings accounts and makes tax credits available to people to help them buy private insurance. It structures the credits not only according to age but to income and geography, as healthcare costs differ in various parts of the country.
All taxes would be repealed under the bill, including the health insurance tax, taxes on prescription drugs and medical devices, and taxes on high-cost health insurance plans, known as the "Cadillac tax."
Though Senate Majority Leader Mitch McConnell, R-Ky, has indicated a desire to vote on the bill by next week, he still needs to win over a number of senators. That means the draft could still change significantly before the final version hits the floor.
The GOP has a smaller margin for error than in the House, which passed the AHCA by a 217-213.
Republicans hold a 52-48 majority and can only afford two defections, since Vice President Mike Pence can break any 50-50 tie. Democrats are expected to unanimously oppose the bill.
Centrists and conservatives have both expressed concerns in recent days on different parts of the bill. Centrists are concerned primarily about the duration of the Medicaid phase out, and some senators want as long as seven years to phase it out. Conservatives are worried that it keeps too much of Obamacare intact.