Slash and Burn

McConnell Snubs the Moderates on Obamacare

The Senate majority leader capitulated to conservatives demanding Medicaid cuts and deregulated markets. In the process, he may have alienated too many others.

Senate Majority Leader Mitch McConnell (R-KY) made a major gamble with the introduction of his second—and likely last—Republican-only bill to repeal and replace Obamacare: betting the moderates in his caucus will fold more easily than the conservatives.

It may not be enough to salvage the legislation.

The Kentucky Republican began Thursday with virtually no room for error. Heading into the introduction of a revised version of the Better Care Reconciliation Act (BCRA), he knew he would likely lose the votes of Sens. Rand Paul (R-KY) and Susan Collins (R-ME)—which he subsequently did after his bill’s introduction. That meant just one more defection would deny him the 50 votes necessary for passage.

Needing still to placate factions from both sides of his party, McConnell bent to the base.

His revised bill does nothing to lesson the massive Medicaid cuts that were a prominent feature of the first version. The bill would still reduce funding for the government insurance program for the poor and disabled by more than 30 percent. Nor does the revised bill alter the original bill’s reforms to Obamacare’s tax credits. Those will still be made less generous and available to fewer consumers.

Instead, McConnell offered his party’s moderate members money to help combat the nation’s opioid crisis and additional money to help stabilize private insurance markets, funded in part by keeping in place some of Obamacare’s taxes on the rich.

The money devoted to both of these is hardly insignificant. Funding for market stabilization was upped by $70 billion to around $182 billion, and the legislation allocates $45 billion for opioid treatment, recovery and research. But while substantial, such investments will likely do little to mitigate one of the original bill’s most politically toxic features: the estimated 22 million individuals who will end up losing their insurance coverage over the next decade.

The only movement that McConnell would make on that front was a vague suggestion that future lawmakers would somehow reverse the very cuts that he was shepherding into law. And shortly after the new bill was introduced, it became apparent that move might not be enough. Sen. Rob Portman (R-OH), whose state expanded Medicaid, hinted that he would vote against the motion to proceed, but a spokesman told The Daily Beast that the senator is undecided.

Collins told reporters she could only vote in favor of a motion to begin debate on the bill if the Congressional Budget Office’s score, set to be released on Monday, shows there “would be far fewer changes in Medicaid than I believe there are now.”

“I do not think that we should rewrite an important, vital entitlement program without having extensive hearings and making sure that we understand the implications,” she added, in a stinging rebuke to the strategy Senate GOP leaders have employed in writing the legislation behind closed doors, and using the budget reconciliation process to shut out Democratic involvement.

The full Senate will vote on the bill next week after the CBO score is released, a GOP aide told The Daily Beast, so McConnell has precious little time to twist arms. And in some respects, he’s already made the critical decision on where he wants the legislative language to go. His revised bill inches the legislation closer to the preferences of his party’s base, and not just in the decision to leave the original Medicaid cuts intact.

The bill allows, for the first time, tax-favored Health Savings Accounts to pay for insurance premiums—a conservative demand. It also allows insurers to skirt a number of the coverage requirements that they must contend with under Obamacare, while simultaneously offering at least one plan that adheres to those standards. This amendment, which insurers have warned would destabilize markets, was pushed strongly by Sens. Mike Lee (R-UT) and Ted Cruz (R-TX). The two senators virtually demanded it in exchange for their votes.

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When push came to shove, McConnell capitulated and those senators rewarded him. While acknowledging that the legislation is not a “total repeal” of Obamacare, Cruz indicated that he would vote in favor of the legislation as is.

“I think this new bill represents a substantial improvement over the previous version. And there are several changes that significantly improve our ability to reduce premiums,” Cruz said.

Cruz did not seem concerned about how far the bill goes to repeal the Affordable Care Act, shrugging off suggestions that he capitulated to GOP leadership by accepting anything less than a full repeal.

“If it were up to me, we would have taken up and voted on a full repeal as Congress had done many, many times. The conference decided otherwise. That was not my decision,” Cruz told reporters.

McConnell’s decision to curry favor with Cruz’s camp is not entirely unexpected. GOP leadership in the House similarly moved their bill in a more conservative direction in order to win the necessary votes. It resulted in narrow passage.

Whether the Senate will follow that pattern seems less certain. Senators from Medicaid expansion states, such as Portman, Dean Heller of Nevada, and Shelley Moore Capito of West Virginia, now face a difficult decision of whether to sink a bill that could be their party’s last chance for a de-facto repeal-and-replacement of Obamacare. Each has signalled discomfort with the very contours of the BCRA that remain in place in version 2.0.

Even before McConnell introduced his revised version there was evidence that his members weren’t particularly enthused or interested. Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-LA) decided to introduce an entirely separate piece of health care legislation—one that would give certain amounts of money to individual states while providing only very basic demands on what they could do with it—just minutes before McConnell’s unveiling.

And earlier in the week, Democratic senators told The Daily Beast that Republicans were signaling a willingness to working with them on bipartisan fixes to the current law. Those talks won’t formally begin until the revised BCRA gets a vote—if it gets a vote at all—and it’s not particularly likely that they will be any more successful.

Lawmakers have focused in particular on the the possibility of stabilizing the private insurance markets—specifically, the creation of a reinsurance fund. But Republicans have demonized the fund in recent years as an “insurance bailout.” Sen. Marco Rubio (R-FL) spearheaded a successful effort to nix it from the Affordable Care Act, and Sen. Paul said the inclusion of it in the new bill would amount to “subsidizing the death spiral of Obamacare.”

“That’s what the insurance bailout superfund is. They call it ‘stabilization fund.’ But that fund, that stabilization fund, is to subsidize the death spiral of Obamacare, not fix it,” Paul told reporters on Wednesday.