(Bloomberg) — Senate Republican leaders issued a long-awaited Affordable Care Act change proposal aimed at winning over both the moderate and conservative wings of their party, but their draft bill was immediately opposed by a group of four GOP senators.
Sen. Rand Paul of Kentucky said he and three other conservative Republicans — Ted Cruz of Texas, Ron Johnson of Wisconsin and Mike Lee of Utah — oppose the version released Thursday and intend to negotiate as a team to improve it. Their opposition could threaten passage of the bill. For the measure to clear the Senate, Republicans can only afford to lose two GOP votes amid unanimous Democratic opposition.
The draft “Better Care Reconciliation Act of 2017” bill includes sharp cuts to Medicaid for the poor and disabled, more modest trims to other Affordable Care Act subsidies and tax cuts for the wealthy that were included in a version passed by the House.
Labeled a “discussion draft,” the plan would provide an additional $50 billion over four years to stabilize insurance exchanges, relying on a mechanism Republicans have criticized in the past as a way to keep insurers in the marketplace.
It largely resembles the House bill passed last month, including the tax cuts for wealthy people, drugmakers and insurance companies. The Senate bill’s initial Medicaid cuts are more gradual than the House, though both end the open-ended funding of the health care system for the poor.
The plan, a product of months of closed-door meetings, includes $15 billion a year in market-stabilizing funds over the next two years and $10 billion a year in 2020 and 2021. These payments would come in addition to cost-sharing subsidy payments, which would be extended through 2019.
“Perhaps the discussion will begin in earnest to make the bill better,” Paul told reporters. “I think you only get changes if you show you have the power to, you know, not vote for the current bill.”
Cruz gave flyers to fellow Republicans with his demands: letting states design coverage without getting a federal waiver, allowing consumers to buy insurance across state lines, and allowing insurers that meet federal mandates to also sell other plans that don’t comply.
Senate Majority Leader Mitch McConnell of Kentucky has previously said he wants the full chamber to vote on the measure next week. Second-ranking Senate Republican John Cornyn of Texas said leaders want votes on multiple amendments starting June 29, with final passage of the bill early the next morning.
The bill will “ultimately transition away from Obamacare’s collapsing system entirely so more Americans won’t be hurt,” McConnell said Thursday on the Senate floor.
But holding a vote next week would be potentially risky for Republican leaders.
“I don’t see how I can get the information I need to get to yes in a week,” Johnson told reporters Thursday.
Plan With ‘Heart’
President Donald Trump said Thursday the Republican plan will have “heart.” “It’s going to be great,” he said at an unrelated event at the White House.
Former President Barack Obama, whose health law was his biggest domestic achievement, said on Facebook the GOP plan “is not a health care bill. It’s a massive transfer of wealth from middle-class and poor families to the richest people in America.”
Obama urged people to contact their representatives to demand that lawmakers seek a compromise to improve Obamacare. “Small tweaks” to the GOP bill “cannot change the fundamental meanness at the core of this legislation,” he said.
Health stocks rose to highs on Thursday, following the bill’s release. The Standard and Poor’s 500 Health Care Index of drugmakers, insurers, hospitals, medical suppliers and other health companies closed at an all-time high, up 1.1%. Hospitals, which would face more gradual cuts to Medicaid under the Senate bill than the House version, were some of the biggest gainers. Shares of Community Health Systems Inc. closed up 5.1% to $9.27, while Tenet Healthcare Corp. gained 6.9% to $18.90.
Sen. Rob Portman, R-Ohio (Photo: Senate)
The plan mostly affects two groups of people: the roughly 72 million whose care is covered through Medicaid, and another 20 million or so who buy insurance in the individual market.
The Senate version phases out the Affordable Care Act expansion of Medicaid over three years through 2023, rather than in 2020 under the House bill. But in 2025, the Senate bill moves to more severe funding caps for the federal contribution to Medicaid, using the consumer price index, rather than a measure of medical inflation that tends to rise more quickly.
In the individual market, the Senate bill has a subsidy system similar to the Affordable Care Act, though less generous. The subsidies would be based on the cost of a low-level bronze plan, rather than a silver plan. Silver plans have an average deductible of about $3,500, while the average for bronze plans is about $6,000, according to HealthPocket Inc., which compares health plans.