May 11, 2017

Senate health care effort wrestles with spending vs. coverage

Caitlin Owens, author of Vitals

Carolyn Kaster / AP

Many GOP senators have been clear that they want their health care bill to have more generous tax credits than the House bill and to soften its Medicaid expansion phaseout. But their hands may be tied: According to Senate budget rules, the upper chamber's bill must save at least as much as the House bill. And the changes some of these more moderate senators want cost money.

What to watch: If the Senate wants to spend more money on assistance for older and low-income people than the House did, it must also bring in more money. This could mean putting off the repeal of some of the Affordable Care Act taxes, or new revenue-raising methods altogether — like, for example, capping the tax exemption for employer insurance benefits (a step the House rejected).

The bottom line: "Something will have to give," said Ed Lorenzen, a senior adviser at the Committee for a Responsible Federal Budget.

Background: Republicans are trying to pass their health care bill through budget "reconciliation," which allows the Senate to pass a bill without being subject to a filibuster. But there are a lot of reconciliation rules, including one that says the Senate has to save as much money as the House bill.

We don't yet know how much the House-passed bill saved, as the Congressional Budget Office hasn't finished scoring it. But earlier estimates had the bill saving about $150 billion over ten years. If that's still the case, then the Senate version can't save any less.

What this means: Most GOP senators are just beginning to wrestle with the fact that they don't have $150 billion to work with to improve the House bill, or to reduce the number of people who will lose coverage. (CBO's earlier estimate said 24 million people would lose insurance.) So unless they want to settle for cosmetic changes to the House bill, they're going to have to make some difficult decisions, particularly about the Affordable Care Act taxes.

What members are saying:

  • Finance Committee Chairman Orrin Hatch: "We're going to have to find some way of paying for the doggone thing. That's what our big challenge is...I'd rather not raise revenues. I'd rather cut revenues."When I asked Hatch whether capping the employer insurance tax exemption is on the table, he said, "I think everything will be on the table."
  • Sen. Pat Roberts: "I don't think anybody wants to be in charge of raising taxes, but you can achieve savings I think by the number of people and the kind of people that you could get to come into a new program." He said it's important to get more young, healthy people into the individual market.
  • Sen. Bill Cassidy: "To think you can cut $800 billion [from Medicaid], as the House bill did, and still continue the coverage, as the president promised, is not compatible."A senior aide reminded me that tax repeals can be delayed to play with revenue. For example, if the insurer tax was repealed in 2022 instead of 2018, that's four more years of tax income the GOP could use to pay for their bill.
  • Sen. Jeff Flake: "We're not just tweaking, we're starting with our own bill. So I think you'll see a different formulation."

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