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If Trumpcare stays dead, Medicaid overhaul could come back to life

J. Scott Applewhite / AP

Don't write off the chances for a rewrite of Medicaid even if Trumpcare dies. Some members of the Senate are quietly discussing taking up a Medicaid overhaul separate from an Obamacare replacement — which could help them pass tax reform by making more money available for it.

This could allow them to make use of both "reconciliation" bills, or special legislative vehicles that would allow the GOP to pass major legislation without being subject to a Democratic filibuster. But it's not clear how serious the discussions are — one aide characterized as side conversations. It's a major lift, and even those who have discussed it say it's hard to see Medicaid reform passing while Obamacare repeal dies.

"I'm not sure anybody's mind's been made up on that," Sen. Orrin Hatch, chairman of the Finance Committee, told me. However, he also said he'd had conversations about it "separately" from the general caucus meeting on Tuesday. Other influential members and aides said they haven't been part of the conversations.

Why we're watching this, despite the long odds: Conservatives have always wanted to overhaul Medicaid to save money. But even more importantly, Republicans really want tax reform. A Medicaid rewrite could produce the savings to produce true tax reform, rather than tax cuts. While House Republicans have proposed a border adjustment tax as a way to produce those savings, Senate Republicans have been less than enthusiastic about the idea.

"When you get more money to deal with [tax reform] with Medicaid reform, that's a lot of money," Sen. Pat Roberts told me. "So it isn't like you're taking from one pot and giving it to another, but it makes the whole scoring situation a lot easier with the budget savings that you could have more flexibility with tax reform."

But even Roberts said he has a hard time seeing Medicaid done without broader health reform. "It will stand on its own legs, either part or not part of the health care reform. But I don't see it happening without it being attached to health care reform," he told me.

Bottom line: Everyone's waiting to see what the House is going to do.