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Trump May Have Just Handed Conservatives a Loss on Obamacare Repeal

Eric Pianin

As negotiations over the Republicans’ Obamacare replacement plan come down to the crunch, President Trump appears to be slamming the door on some last-minute conservative demands for fear of driving away moderate backing.

Joseph Antos, a health care expert with the conservative leaning American Enterprise Institute, said on Monday that “everything about the bill is problematic” from a political and practical standpoint, and that Trump and House Speaker Paul Ryan (R-WI) must thread a needle in devising compromises to placate all sides in the controversy.

Related: Ryan Says House GOP is ‘On Track’ to Repeal Obamacare and Pass the ACHA

With a vote on the GOP’s American Health Care Act looming on the House floor as early as Thursday, the White House notified three prominent conservatives senators over the weekend that they likely won’t get some of the changes they have been seeking, including an accelerated schedule for phasing out expanded Medicaid coverage in 31 states and the District of Columbia and efforts to eliminate red tape for the insurance industry.

The proposal to speed up the time table for phasing out Medicaid expansion under the Affordable Care Act from early 2020 to late 2018 has been sought by members of the arch conservative House Freedom Caucus and prominent Republican senators including Rand Paul of Kentucky, Ted Cruz of Texas and Mike Lee of Utah to make good on the GOP campaign pledge to dismantle Obamacare and further reduce spending on health care.

But moderate Republicans in both chambers and some GOP governors whose states have benefited from the additional health care coverage for 11 million mostly childless, able-bodied low-income adults are threatening to torpedo the proposed replacement legislation if conservatives prevail in their demand.

Total Medicaid spending increased by 11.6 percent in FY 2015, rising to $556 billion. Most of the growth was the result of an increase in federal spending, which rose by 16.0 percent and is a direct result of Medicaid expansion under Obamacare. In comparison, overall state spending on Medicaid increased by only 4.7 percent.

Last month, four Republican senators with states that expanded Medicaid under Obamacare – including Rob Portman of Ohio, Shelley Moore Capito of West Virginia, Cory Gardner of Colorado and Lisa Murkowski of Alaska – signed a letter saying they couldn’t support the House GOP bill because it won’t protect people enrolled in the health care entitlement.

Related: With Medicaid Costs Soaring, Republicans Plan Dramatic Eligibility Changes

Politico reported yesterday that during a meeting at Trump’s Mar-a-Lago resort in Florida on Saturday, several of the president’s top advisers including Steve Bannon told Cruz, Lee and House Freedom Caucus chair Mark Meadows (R-NC) that it was increasingly apparent that the replacement plan would fail in the Senate with the accelerated Medicaid phase-out provision attached to it.

Cruz told Politico last week, “We can fix [the legislation] by meaningful Medicaid reform in particular: Freezing Medicaid expansion immediately, not holding open expansion for three more years to allow states to put yet more healthy childless adults onto an already overburdened Medicaid system.”

Antos said that the idea of a quick phase-out of the expanded Medicaid program was highly impractical – as well as politically infeasible – because states participating in the program had to pass conforming legislation or other regulatory action to take part. If the much shorter phase-out deadline were enacted, Antos said, “I don’t think the states would be able to realign their programs in time.”

Many moderates are also alarmed by the Congressional Budget Office (CBO) forecast that as many approximately 14 million people would opt out of insurance because the mandate would be eliminated and another 10 million would lose their health insurance over the coming decade if Medicaid expansion was ended or curtailed.

Related: Trump's Health Chief Fails to Convince Patients They'll Get the Care They Need

In replacing the Obamacare tax subsidies, the Republican plan would provide fixed credits to individuals making up to $75,000 a year and families making $150,000 a year, with older people receiving higher credits than younger people because their medical costs typically are much higher.

However, the CBO analysis showed that while the House GOP bill would bring down overall premiums on individuals in the private market by about 10 percent by 2026, older people would end up paying far more for their premiums than younger Americans. For example, a 64-year-old person who would pay $1,700 in average premiums under Obamacare would see premiums skyrocket to $14,600 a year under the GOP plan – a 750 percent increase. By contrast, a 21-year-old who pays about $1,700 under Obamacare would pay only $1,450 under the GOP approach.

Sen. Susan Collins of Maine, a prominent moderate who has been highly critical of the GOP plan, said on Sunday on NBC’s Meet the Press, “We have to do something about the fact that the House bill disproportionately affects older, rural Americans” while wiping out coverage for millions of Americans across the board.

House Speaker Paul Ryan (R-WI) said yesterday that he is pushing for an increase in the tax credits to help older people 50 to 60 years of age to purchase insurance and to allay the concerns of moderate Republicans.

Related: Trump’s ‘Hard Power’ Budget Gives Billions to Defense, Guts Domestic Programs

Conservative are likely to have their way on several other matters, including imposing work requirement on able-bodied childless adults receiving benefits under expanded Medicaid and allowing states to choose between two alternatives to continuing to treat Medicaid as an open-ended entitlement program. 

States would be allowed to opt for a per-capita payment for Medicaid beneficiaries in their states with a cost of living adjustment or a fixed “block grant” that they could use to cover much of their annual Medicaid costs but have more flexibility in setting eligibility rules. The average annual cost per capita of a Medicare beneficiary in 2016 was $6,502, although some states are much higher. New York averages $8,910 per beneficiary; Rhode Island, $8,229; New Jersey, $8,309; and Florida $8,887, to name a few.

The House Budget Committee approved both measures last week and they are almost certain to be part of a package of amendments attached to the GOP replacement plan when it is brought to the floor late this week.

However, many conservatives complain that the House GOP approach doesn’t move quickly enough to repeal all the Obamacare mandates and taxes and the expanded Medicaid program. “The problem is, see, we as conservatives ran on repeal of Obamacare,” Rand Paul said yesterday on ABC’s This Week. “I was elected in 2010, right after it came into place, to repeal it. We never ran on a replacement of Obamacare Lite. We never ran on making the entitlement subsidies permanent. We never ran on an individual mandate or keeping the taxes or keeping the Medicaid expansion. We ran on repealing Obamacare because it doesn't work.”

Trump predicted late last week that the House would approve the GOP plan and he told reporters aboard Air Force One on Sunday that efforts to line up support for the bill are “going well.” The president plans to meet with Republican lawmakers at the Capitol on Tuesday to make a final pitch for support, with the outcome of the vote still up in the air.

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