It’s now clear that the latest Republican effort to repeal and replace Obamacare is gaining significant steam in the Senate. It’s doing so because Senate Republicans are tired to hearing that they aren’t doing anything to push the ball forward, and also because the latest deadline on September 30 means that Republicans must either pass a new budget or lose their opportunity for reconciliation under the Senate rules.
So, what’s in the new bill, sponsored by Senators Lindsey Graham (R-SC) and Bill Cassidy (R-LA)?
Here’s what you need to know.
1. Medicaid Gets Slashed. Technically, Medicaid growth gets slashed. Instead of the federal government sending money to states on a need basis, states are given block grants — and more importantly, all the money is pooled and redistributed, rather than granted to states that expanded their Obamacare-subsidized Medicaid rolls. The goal would be to cut expected Medicaid funding on the federal level by one-third by 2026, and eliminate it entirely by 2027. But that’s ten years down the road, and unlikely to ever occur.
2. Medicaid Gets Redistributed. The states hardest hit are those that have already expanded their Medicaid rolls, attempting to take advantage of President Obama’s subsidies. The new rules would benefit states like Wisconsin, Alabama, and Mississippi at the expense of states like New York and California.
3. No More Individual Mandate. This was always the least popular part of Obamacare, and it would disappear. This means many people would voluntarily drop out of the health care market. It also means that insurance companies would likely raise their rates to compensate.
4. States Get The Ability To Waive Essential Benefits. Under this new plan, states could waive certain “essential health benefits,” opening up the market some more. Pre-existing conditions regulations would remain on the basis of sex, for example, but states could waive regulations forcing insurance companies to cover certain “essential health benefits.” The bill still requires states to show “how the state intends to maintain adequate and affordable health insurance coverage for individuals with preexisting conditions.”
This is a better bill than the one the Republicans rejected a few months back. It still won’t do enough to open up competition — until all pre-existing conditions regulations are removed, competition won’t be free and open. It also doesn’t get rid of all of Obamacare’s taxes. It’s going to be difficult for Republicans to pick up Senator Rand Paul’s (R-KY) vote, and Republicans may have to ignore Planned Parenthood funding in order to grab the votes of Senators Lisa Murkowski (R-AK) and Susan Collins (R-ME). In any case, this won’t be an Obamacare repeal. It will be a continuation of Obamacare, with significant cuts to Medicaid. Until key Obamacare regulations and taxes are fully removed, watch for premiums to increase as the individual mandate is repealed.