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July 21, 2017

In push for votes, GOP leaders float $200B in funding to reduce effects of Medicaid cuts

Daily Briefing

    The Senate recessed Thursday for the weekend, but GOP senators appeared no closer to identifying which health reform proposal they would be voting on next week.

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    Senate GOP leaders are reportedly considering moving forward with either:

    • A revised  Better Care Reconciliation Act (BCRA), which the Congressional Budget Office (CBO) on Thursday said would leave  22 million more individuals uninsured while reducing premiums but significantly increasing deductibles for benchmark plans by 2026; or
    • A revived 2015 "repeal-and-delay" measure, which CBO on Wednesday said would leave 32 million more individuals uninsured and cause premiums in the non-group market to rise by about 50 percent by 2026.

    Some Senate Republicans have said they also are still considering the Consumer Freedom amendment by Sen. Ted Cruz (R-Texas), which HHS said would lower premiums and increase enrollment in individual market plans. However, that amendment was not included in the revised BCRA that Senate GOP leaders released yesterday. 

    But any bill that Senate Majority Leader Mitch McConnell (R-Ky.) seeks to advance is likely to undergo significant changes before a vote is held. For one, moderate and conservative Republicans are still at odds over what they would like a health reform bill to do, the Washington Post's "PowerPost" reports.

    Another key factor is the Senate parliamentarian has yet to rule if any provisions conflict with the Senate's strict reconciliation rules. According to Axios' "Vitals," the parliamentarian on Friday is expected to brief senators on her findings.

    Verma's Medicaid pitch

    In an effort to bridge the gap between moderate and conservative GOP senators on Medicaid, CMS Administrator Seema Verma during a meeting at the White House on Wednesday proposed changes that would give states up to $200 billion in one-time funding that states could use to cover out-of-pocket costs for certain low-income individuals, the Journal reports.  

    According to The Hill, the proposal is intended to help offset the loss of the ACA's enhanced federal Medicaid funding, which the BCRA would eliminate beginning in 2020. According to a source familiar with the plan, the additional dollars would be funded by leaving in place two ACA taxes and would primarily be used for ACA expansion states, The Hill reports.

    Sen. Dan Sullivan (R-Alaska) explained that states under the proposal would be permitted to use Medicaid funding, as well as federal tax credits and funding from a BCRA state innovation fund, to help cover U.S. residents who would lose insurance as a result of the Medicaid expansion wind-down.

    Sullivan acknowledged that some stakeholders have raised concerns that shifting Medicaid expansion beneficiaries into private health plans might mean they have lower-quality coverage. He told senators, "As you all know, a lot of providers don't take Medicaid. You might actually have a much more broad choice of providers for your health insurance" under a private health plan.

    Sen. Roy Blunt (R-Mo.) said the proposal "got some resonance" during Wednesday's meeting, adding that senators representing states that have expanded Medicaid "seem to be interested by" it.

    However, several senators appeared underwhelmed by the proposal. Sen. Susan Collins (R-Maine) said she did not think the proposal would adequately offset the Medicaid cuts included in the BCRA."If you're still going to take more than $700 billion out of the Medicaid program, you still have significant problems," Collins said.

    Sen. Chris Murphy (D-Conn.) expressed similar doubt, saying, "That's one of those tiny Band-Aids that you use for a child's cut." He added, "I would hope that won't win over any votes just to postpone the pain for a couple years or a couple months," after the one-time funding has expired.

    Vote next week

    McConnell is still expected to hold a vote Tuesday to try to begin debate on a health reform bill, Politico reports.

    But Sen. Dean Heller (R-Nev.) said Thursday after a GOP lunch that senators "still can't figure out what the first amendment is going to be after the motion to proceed" on the House-approved American Health Care Act.

    Senate Majority Whip John Cornyn (R-Texas) suggested senators would hold the vote regardless of whether it will pass, saying, "We can always come back if it's not successful by one vote; we can come back when [Sen. John McCain (R-Ariz.)] is available." McCain is currently at home after being diagnosed with brain cancer.

    Democrats propose ACA 'fixes'

    Meanwhile, a group of House Democrats on Thursday offered details on ways lawmakers could seek to bolster the ACA if it remains in place, Axios' "Vitals" reports.

    During a press conference on Thursday, House Minority Leader Nancy Pelosi (D-Calif.) and four other House Democratic leaders said lawmakers could:

    • Pass legislation to permanently fund the cost-sharing reduction payments to insurers called for under the ACA;
    • Expand the ACA's tax credits;
    • Increase health insurance options for individuals living in rural counties where no insurers sell exchange plans, such as by allowing such people to purchase coverage through Washington, D.C.'s, exchange; and
    • Make permanent the ACA's temporary reinsurance program (Haberkorn et al., Politico, 7/20; Gever, MedPage Today, 7/20; Sanger-Katz, "The Upshot," New York Times, 7/21; Sullivan, The Hill, 7/21; Baker/Nather, "Vitals," Axios, 7/21; Snell/Goldstein, "PowerPost," Washington Post, 7/20; Bolton/Sullivan, The Hill, 7/19; Litvan et al., Bloomberg, 7/19; Radnofsky/Peterson, Wall Street Journal, 7/20; Bolton, The Hill, 7/19).

    Is your Medicare risk strategy MACRA-ready?

    While the GOP's health reform effort continues to evolve, Medicare payment reform has quietly marched on with bipartisan support. And with MACRA well underway, the new administration has shown no signs of reversing course. As a result, hospital and health system leaders need to develop an intentional Medicare risk strategy today.

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