Senate Republicans Release Their Obamacare Replacement Plan

Senate Republicans on Thursday announced a wide-ranging plan to roll back the Affordable Care Act, with features that include a dramatic reduction in government spending that could mean millions more Americans will be left uninsured.

The plan, unveiled by Senate Majority Leader Mitch McConnell and his team after working on it largely behind closed doors in recent weeks, would strike residents particularly hard in California, in large part because the Senate bill proposes deep cuts to Medicaid, called Medi-Cal in this state.

Fourteen million Californians — more than one-third of the Golden State’s residents — are covered under the healthcare program for low-income residents, including about four million added since 2014 through a provision of the Affordable Care Act that allowed adults without dependent children to enroll.

Anthony Wright, executive director of Health Access California, said the bill’s “draconian cuts” to Medicaid would be widely felt, affecting not only “half of our children, and two-thirds of our seniors in nursing homes, but the health system on which we all rely.”

Wright said the Senate bill also would spike premiums and deductibles for many middle-class families who are covered by plans under Covered California, the state’s health care insurance exchange established under the Affordable Care Act, commonly called Obamacare.

The Senate bill is similar to the version of the House bill that passed last month, but with some key changes. The text released Thursday suggests the Senate’s version would repeal Obamacare’s individual mandate, drastically cutting back federal support of Medicaid, eliminating Obamacare’s taxes on the wealthy, insurers and others. The Senate plan, however, would keep Obamacare’s subsidies to help people pay for individual coverage.

But Peter Lee, executive director of Covered California, underscored in a tweet Thursday the devastation he predicts awaits many of the state’s residents.

“While it appears that the Senate bill largely adopts the marketplace and subsidy structure of the Affordable Care Act, in many ways we could be returning to the days when consumers who thought they were covered found the rug pulled out from underneath them when they tried to get health care.”

Jonathan Greer, a spokesman at the Golden Gate Association of Health Underwriters, agreed, saying fewer middle-income Californians would be eligible for health insurance subsidies since the bill lowers the maximum income level to receive a subsidy.

“In a high-cost state like California, that’s a big problem,” said Greer. For example, he said a family of three earning $75,000 a year is currently eligible, but wouldn’t be under the new bill. In the Bay Area, an unsubsidized Silver plan offering benefits such as low-cost prescription drugs can cost more than $1,000 per month, he said.

Greer pointed to a bit of good news for lower-income Californians in the Senate’s version: unlike the House bill that proposed age-based subsidies, the Senate bill it retains Obamacare’s income-based premium subsidies that millions rely on make health insurance more affordable.

But it’s the dramatic cuts in federal funding to Medicaid that will impact states hardest and force them to make deep cuts in the healthcare program for the poor.

That hit home with Gov. Jerry Brown, who pulled no punches Thursday in his assessment of the Senate plan.

“Trumpcare 2.0 has the same stench – and effect – as the bill House Republicans and the White House slapped together last month: Millions will lose health care coverage, while millionaires profit,’’ Brown said in a statement. “The American people deserve better.”

A day before, Trump had continued to tweet his support for plans to do away with Obamacare.

Some Bay Area health policy experts agree with him, including Lanhee Chen, a fellow at Stanford University’s Hoover Institution who has long supported replacing Obamacare, and on Thursday called the Senate bill “an improvement” over the House version.

“For states that want to experiment with their own health solutions, the bill will provide greater flexibility and an opportunity to generate reforms that work best for their own citizens,’’ said the former top adviser to GOP presidential candidates Mitt Romney and Marco Rubio.

Chen also noted the bill provides more generous support than the House-passed bill to low-income individuals and families purchasing private health insurance.

Fellow Bay Area GOP health care adviser Sally Pipes was not as sanguine.

“It is worse than I imagined — I think it will keep Obamacare in place forever if it passes the Senate,” said the president and CEO of the San Francisco-based Pacific Research Institute, a nonprofit that promotes limited government.

For example, Pipes noted that the Senate bill keeps the Medicaid expansion in place for three more years and then a three-year phaseout, which she said, “means the expansion will never end.”

The Senate bill tax credits also are the same as those under Obamacare, declining from 400 percent of the federal poverty level to 350 percent, but not until 2020. And the cost sharing reduction payments to insurers — about $7 billion a year — will be extended for two years.

But Pipes was satisfied that the Senate bill would end both the individual and employer mandates for health insurance. Meanwhile, health savings account would be expanded and double the amounts individuals and families can put in those accounts.

Such support was all but drowned out by negative reaction in a state that has long championed Obamacare and its success in slicing the number of uninsured Californians by more than one-half.

Just this week, proponents of the health care law could point to a poll released Monday by UC Berkeley’s Institute of Governmental Studies found that a record number of residents — 65 percent — now support the Affordable Care Act.

The poll also showed that 56 percent of Californians worry that they or someone in their family will lose health insurance coverage if the law is dismantled. And support for the Medi-Cal program, the poll found, is strong among all political persuasions, including 75 percent of registered Republicans.

When it comes to employer plans, a survey by Willis Towers Watson released Thursday said even though about one-third of employers are not sure of future plans, more plan to keep popular provisions than make changes.

For example, if unlimited lifetime benefits are repealed, employers are more than three times more likely to keep them in place than they are to reinstitute lifetime dollar limits: 50 percent versus 15 percent, according to Towers Watson.

In addition, employers are nearly six times more likely to maintain contraceptive coverage at 100 percent than they are to reduce it: 59 percent versus 11 percent, the survey said.

The proposed bill is the first concrete display of what the Senate GOP conference will have to work with to overhaul the nation’s health-care system. But there’s not much time: with McConnell pushing for a vote next week, senators have just a handful of days to decide whether to support or vote against the bill.

By keeping the details tightly under wraps until Thursday, McConnell and his colleagues seemed to be hoping they could win over their colleagues, while keeping the horsetrading out of the public spotlight. In the process, however, their secrecy angered Democrats while aggravating a number of Republicans, too.

The vote required for the bill’s passage will be tight: McConnell can afford to lose only two Republican votes.

At a campaign rally in Cedar Rapids, Iowa on Wednesday, Trump said he hoped to “surprise” Americans with a plan that has “heart.”

“I hope we are going to surprise with a really good plan,” Trump. “You know I’ve been talking about a plan with heart. I said add some money to it. A plan with heart, but Obamacare is dead.”

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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