The Takeaway: What’s the Deal in the Senate?

Even close readers of the news can be forgiven for not understanding how perilously close the Senate is to not only ripping coverage away from millions of people, but also cutting Medicaid funding for children, seniors and people with disabilities and putting a vice around the program. After all, there continue to be multiple conflicting reports relating to the content, timing and degree of agreement among Republican senators. So, without further ado, your handy guide to what we know and don’t know about where things stand in the Senate.

More like the House bill than not

Despite all the denials and claims that they are starting over, the House bill will provide the basic architecture of what the Senate does. It is not the case that the Senate will bring the House bill to the floor and then replace it with a substitute that looks much different. The key elements of the House bill – eliminating the Medicaid expansion, capping federal Medicaid funds to states, slashing tax credits and cost-sharing assistance in a way that particularly harms lower-income and older people, undermining insurance market protections for people with preexisting conditions, and big tax cuts for the rich and for insurance companies and the drug industry – will all likely be retained in the Senate proposal.

Less opposition than you might think

There is more support in the GOP Senate caucus for this “basket of deplorables” than people may realize based on senators’ public statements. In particular, it would be a mistake to conclude that members who have expressed skepticism that the Senate will pass a bill will themselves ultimately be a “no” vote. Everyone is still leaving themselves with a lot of wiggle room, and many of the most vocal Senate critics of the House proposal have begun making positive noises about the Senate bill, even though it will be very similar (Senator Cassidy, a case in point).

Sooner rather than later

The issue is coming to a head sooner rather than later – McConnell wants to get off of health care and move on to other matters like reforming the tax code. We are expecting a Senate vote before the July recess begins on June 30, though it is not impossible that it could slip until immediately after the recess. That doesn’t mean the Senate Majority Leader will just throw a bill out there and figure “if it fails, it fails.” The public comments following the Republican caucus last week suggest that he is making headway toward getting the 50 votes he needs.

Don’t expect to see the bill in advance

The exact contours of the Senate proposal will be kept from the public (and the members) until the very last minute. While the situation is serious, some important decisions and significant fault lines remain, including:

• Medicaid: With respect to Medicaid, the timing of the phaseout of the expansion remains uncertain. A number of senators are on record in support of a seven-year phaseout of enhanced federal match. While the disastrous end results would be the same, there appears to be a sense among the “moderates” that a slower phaseout provides better optics and ideally – from their point of view – delays the worst consequences of the bill until after their next reelection bid, whether that falls in 2018, 2020 or 2022.
• Per Capita Cap Growth Rate and Base Year: There has been an ongoing debate between senators who want to keep or improve on the growth rate in the House bill and those who want to cut Medicaid spending even more than the $839 billion in AHCA. There have been rumors of a trade between a lower growth rate and a longer phaseout of the expansion, but at this point those remain rumors. Meanwhile, both the growth rate and the base year of the cap have emerged as potential flash points. Some senators from low-spending states have voiced concerns about being unfairly locked into lower federal reimbursement rates in perpetuity.
• Tax Credits: The Senate will try to add some money back to the House proposal to soften the blow on lower-income and older adults, but they are unlikely to have enough money to prevent a massive drop off in insurance coverage. The question is whether that will deter any senators from voting for the bill and whether we will even know the CBO estimate of the effect on coverage before the Senate votes.
• Tax Cuts: Expect the Senate proposal to mirror the House but with delayed effective dates to help pay for the slower phaseout of the Medicaid expansion and for adding money to the tax credits.
• Consumer Protections: The provision allowing states to let insurers charge people more if they are sick or “high risk” will likely fall out, but state waivers of Essential Health Benefits at this point appear likely to stay in. With dramatically lower premium support, states will be under pressure to cut down the benefit package whether they want to or not. The result will be a big spike in out-of-pocket costs, particularly for people with serious and expensive health conditions.

While the Senate is trying to speed toward the floor, some process challenges remain that have not been fully worked through. Three are worth keeping an eye on:

1. Cost Sharing and the Indian Health Service

Democrats are arguing that the provision of the law that eliminates cost-sharing assistance touches on the jurisdiction of the Indian Affairs Committee. Since that committee did not receive reconciliation instructions, sending the bill over to the Senate as-is could remove the protection of the reconciliation process and subject the bill to a 60-vote requirement, under which it would certainly fail. To avoid this, the House would have to amend the bill before it is formally transmitted to the Senate.

2. Allocation of Savings

In order to comply with the reconciliation instructions, which are what enable the bill to move forward with a simple majority, both the HELP and Finance committees must identify at least $1 billion in savings. Senate Budget Committee Chair Enzi has asserted both that the bill meets that test and that he is the arbiter of whether it does or doesn’t. Ranking minority member Sanders is arguing that the bill fails the test and that the Parliamentarian must make a ruling.

3. Abortion

The House bill prohibits tax credits from being used for plans that cover abortion. This could run afoul of the Byrd rule, which requires provisions in a reconciliation bill to have a more-than-incidental effect on the budget. If the language is stricken, anti-choice legislators in either the Senate or House could withdraw their support from the tax-credit provisions entirely, which could sink the bill.

Even as more moderate members have indicated that they are encouraged, the most reactionary members are starting to voice concern and displeasure. Since McConnell can’t afford to lose three votes in the Senate, opposition from Senators Paul, Lee and Cruz, among others, could sink the bill.

With all of the uncertainty swirling around, McConnell still has two main paths to getting a bill through the Senate (and ultimately to final passage). First, he could get all the moderates on board while losing only two from the far right. Then, back on the House side, if some Freedom Caucus members flip to “no,” their votes could be offset by House members who voted “no” on AHCA in May but now could hide behind the largely cosmetic changes in the Senate: this could allow the Republicans to eke out a narrow victory. In the alternative, McConnell could follow the path of the House, appease the far right and dare the shaky moderates to vote “no.”

One thing we do know for sure: Unless the GOP skeptics of the House bill face an outpouring of resistance in the next few weeks, we are likely to see not only a rollback of the progress made since 2009 but also a fundamental undermining of the health care safety net that has been in place since 1965. That ought to make America great again.

With thanks to Quynh Chi Nguyen, policy analyst, for her assistance.