New Obamacare Repeal Lacks Provisions That Won House Moderates

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By Alex Ruoff

The latest Obamacare repeal bill has major flaws, but it appears to be Republicans’ last opportunity to overhaul the health law, the Republican head of a bipartisan House centrist group told Bloomberg BNA.

The Graham-Cassidy bill lacks several provisions that helped get an Affordable Care Act repeal bill passed in the House earlier this year, Rep. Tom Reed (R-N.Y.) said. The House bill gradually wound down federal spending on insurance subsidies and Medicaid, and contained a provision specifically meant to win over New York Republicans, said Reed, one of the heads of the Problem Solvers Caucus.

Senate Republicans next week face the hard choice of whether to vote for an ACA overhaul bill being rushed to the floor. If it passes, House Republicans will face the same choice.

“This is moving quicker than most are comfortable with,” Reed said. “But doing nothing on health care is just not acceptable. There’s a lot of pressure on them to act.”

The House’s American Health Care Act ( H.R. 1628) passed by a slim margin, 217-213, with all Democrats and 20 Republicans opposed. However, there are now three more Republicans in the House who filled empty seats this year.

It’s unclear how much support there is in the House for the Graham-Cassidy bill, named after its main sponsors Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.). The bill is a major departure from previous repeal bills because it keeps most major tax provisions of the ACA and ends the individual and employer mandates without any replacement like a continuous coverage requirement.

The bill has support from House Speaker Paul Ryan (R-Wis.) and the head of the influential conservative House Freedom Caucus, Mark Meadows (R-N.C.). Ryan has signaled he’ll hold a vote on whatever comes out of the Senate, and President Donald Trump has announced he would sign the Graham-Cassidy bill into law.

Questions About Bill

At the heart of the Graham-Cassidy bill is a massive shift in where federal funds for insurance subsidies and public health insurance programs would be directed, from states that embraced the ACA like New York and California to states that rejected it like Alabama and Georgia.

This puts Republicans in states that expanded their Medicaid programs and pushed hard to get people to sign up for ACA plans in a bind: There will be less money for public programs, but they’ll get the kind of entitlement reform they have sought for years.

This same issue came up earlier in the year when House leaders were designing their repeal bill. To appease blue-state Republicans, the AHCA contained sweeteners, like a provision aimed at forcing New York to stop collecting funds from local governments to support the state’s Medicaid program.

The amendment would have barred New York from receiving federal reimbursements for state Medicaid funds raised by local governments, effectively forcing state officials to choose between collecting the $2.3 billion from its counties or facing a similar cut to the $33.15 billion the federal government contributes to the state. The amendment garnered votes from three New York Republicans: Reps. John Faso, Claudia Tenney, and Elise Stefanik.

There was also a $15 billion reinsurance fund meant to ease concerns that altering the ACA’s insurance regulations could leave the sickest Americans unable to afford health-care services. No such fund exists in Graham-Cassidy, but the bill does allow states to create reinsurance programs with their block grant funds.

Reed said he hasn’t made up his mind about the Graham-Cassidy bill, which would convert the ACA’s insurance subsidies and Medicaid funds into a block grant in 2020. New York is set to lose $52 billion in insurance subsidies and Medicaid funds between 2020 and 2026 compared with current law, according to an analysis from the Kaiser Family Foundation.

However, Medicaid would switch from an open-ended federal-state match to a capped block grant, where states receive a fixed allotment based on enrollment and other factors, a major priority for Republicans like Reed who regularly decry how their state governments spend heavily on such public programs.

“I support a per-capita cap, as long as it recognizes the investments New York has made,” Reed said. “This approach might be a little too much for me, without some kind of relief for people who rely on these programs.”

Reed is not alone in questioning whether to support for Graham-Cassidy. Rep. Lou Barletta (R-Pa.), who also supported the House-passed bill, told Bloomberg BNA in a statement that he’s reviewing the bill to determine if it properly prohibits people who entered the country illegally from receiving insurance subsidies.

Barletta’s vote for the AHCA in May was predicated on the promise the House would later separately pass such a prohibition.

To contact the reporter on this story: Alex Ruoff in Washington at aruoff@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

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