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Medicaid becomes big threat to GOP’s healthcare revival

© Greg Nash

The biggest problem for Senate Republicans struggling to revive their healthcare legislation is the one that has bedeviled them from the beginning: Medicaid.

Deep cuts to the social safety net have led to a revolt from centrist GOP senators backed up by their home-state governors, who accepted federal funding under the Affordable Care Act to expand their Medicaid rolls.

They are all worried that the Senate bill’s unraveling of that expansion would leave millions of people without health insurance, a belief bolstered by a nonpartisan budget analysis that found 22 million more people would be uninsured in the bill’s first decade as law.

Winning over the GOP centrists, including Sens. Susan Collins (Maine), Dean Heller (Nev.), Rob Portman (Ohio) and Shelley Moore Capito (W.Va.), would almost certainly mean making significant changes to the Senate bill’s rollback of Medicaid that would make the legislation more expensive.

That would turn off Senate conservatives, whom Senate Majority Leader Mitch McConnell (R-Ky.) is also struggling to win over.

Sen. Pat Toomey (R-Pa.), asked Wednesday how important it was to keep Senate language restricting Medicaid’s growth, told reporters it’s “very important.”

Pressed on whether his support for the legislation hinges on its inclusion, he said, “It’s very, very important to me.”

Senate leadership is working under a tight time frame, aiming to wrap up negotiations by the end of this week and then send a revised version of the bill for the Congressional Budget Office (CBO) to score over the weeklong recess. But there’s deep skepticism that can happen by Friday.

Medicaid has long been seen as a high hurdle to getting healthcare reform done in the Senate.

It was less of an issue in the House, which passed its ObamaCare repeal-and-replace legislation in May after a battle that centered more on what rules insurers would have to meet in offering insurance.

Conservatives in the House and Senate alike have sought changes to ObamaCare that would lower premium costs and have looked to weaken ObamaCare’s rules to allow insurers to offer cheaper coverage plans.

In the Senate, Medicaid has been a much bigger part of the debate, in part because 20 Republican senators — almost half of the conference — represent states that accepted the expansion. These senators are concerned about how changes to the healthcare law will affect constituents across their states.

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The Senate bill begins ratcheting down the federal match for expansion states in 2021, reverting it to pre-ObamaCare levels by 2024. The House took a more conservative approach and included language in its bill that would have ended the expansion in 2020.

But the Senate approach has not won over all of the senators from Medicaid expansion states, who were advocating a seven-year phaseout of the extra federal funds for Medicaid expansion.

Another unresolved issue is how to calculate spending on the Medicaid program.

Both the House and Senate bills institute a per person cap on Medicaid funding for each state. That cap would be adjusted annually for inflation, but there are disagreements on what formula should be used.

The current language in the Senate bill includes deeper cuts than the House beginning in 2025. It ties the growth rate for Medicaid funding to the consumer price index for medical care before switching it to CPI-U in 2025 — which would lead to deeper cuts. This is the language that Toomey and other conservatives want to make sure stays in the bill.

In its analysis, the CBO estimated 15 million fewer people would be enrolled in Medicaid by 2026 under the Senate bill, which it said would lead to a $772 billion cut to the program.

After an effort to hold a vote on the bill this week was delayed, Capito and Portman cited Medicaid in announcing their opposition to the bill.

Portman and Capito represent Medicaid expansion states that have been hit hard by the opioid epidemic. Medicaid is a large payer of services for those with an opioid addiction.

The two had been pushing for $45 billion over a decade to combat the opioid addiction crisis. But the bill falls far short of their ask, instead including just $2 billion for fiscal 2018.

McConnell could put more money in that pot, but Capito indicated Tuesday that probably wouldn’t be enough to win her vote.

Ohio Gov. John Kasich (R) — who has been calling for a bipartisan compromise on healthcare — said he’s warned Portman against being won over by minor concessions.

“I told him, ‘If they hand you a few billion dollars on opioids … that’s like spitting in the ocean,’ ” compared with the billions the bill would cut from Medicaid, Kasich said at a press conference Tuesday.

One option for leadership would be to soften the Medicaid provisions for moderates and include more flexibility on insurance regulations for conservatives. An aide to Sen. Mike Lee (R-Utah) confirmed he may be open to Medicaid changes “if Americans were given more relief from ObamaCare’s Title I regulations,” which are ObamaCare’s insurance rules.

McConnell has nearly $200 billion in savings to pad the bill in an effort to win enough support for passage. But it’s unclear if that’s enough.

“Tinkering around the edges, putting a little bit of money in for one program or another, is not going to be sufficient,” Collins told reporters Wednesday. “I want to see changes that would have a real impact on the Medicaid issues and the number of people insured.”

When asked how to pay for a longer transition for Medicaid or a higher cap, Senate Finance Committee Chairman Orrin Hatch (R-Utah) didn’t know.

“Well that’s the question for everything,” he said. “How are we going to pay for all this stuff no matter what we do?”

So, how can leadership massage the bill in a way to get both conservatives and moderates on board?