Draft bill to replace Obamacare would cut Medicaid and middle-class tax credits, and strip funding from Planned Parenthood

This article is more than 3 years old

This article is more than 3 years old

After weeks of secret negotiations, the US Senate has released its draft of a bill that could upend the healthcare system for millions of Americans.

The Senate’s 142-page proposal, unveiled on Thursday, would eliminate or reduce key benefits provided by Barack Obama’s Affordable Care Act; lower taxes for the wealthy; strip funding from the women’s reproductive health provider Planned Parenthood; and dramatically cut and restructure Medicaid, America’s public health insurance program for low-income and disabled Americans.

The legislation mirrors the bill that the House of Representatives passed narrowly last month, with modest changes intended to win support from moderate senators. Meanwhile, Republican Senate leaders emphasized that the legislation is subject to change as they negotiate details in an effort to win 50 votes, the minimum required for the bill to pass.

Donald Trump said he thought the final legislation would be “very good” after “a little negotiation”. He said: “Obamacare is dead, and we’re putting a plan out today that is going to be negotiated. We’d love to have some Democrats’ support, but they’re obstructionists.”

On Wednesday night, Trump had called on Republicans to improve the House plan by giving it more “heart”.

President Obama, in a rare intervention, urged Republicans to put people before politics, writing on Facebook: “I still hope that there are enough Republicans in Congress who remember that public service is not about sport or notching a political win, that there’s a reason we all chose to serve in the first place, and that hopefully, it’s to make people’s lives better, not worse.”

He warned the legislation would raise costs, reduce coverage, roll back protections, and ruin Medicaid as we know it, adding: “The Senate bill, unveiled today, is not a health care bill. It’s a massive transfer of wealth from middle-class and poor families to the richest people in America.”

These are the people at the mercy of Trump's healthcare bill Read more

Senate Republicans heard about the substance of the healthcare reform effort for the first time on Thursday morning, just days before the leadership intends to hold a vote.

Experts believe the legislation could leave millions of Americans without health insurance, and could have a stark impact on vulnerable populations such as people recovering from addiction, ageing middle-class baby boomers, and women and children.

That impact is likely to prompt questions about how senators can sell voters on a bill that left the House with a 17% public approval rating, and the expectation that 23 million Americans will lose health insurance.

Like their counterparts in the House, Republican senators want to give middle-class Americans tax credits to buy insurance, but those subsidies would still be worth less than those currently provided by the Affordable Care Act, better known as Obamacare. People would also need to earn less money to qualify for them.

The draft bill released by the Senate

Additionally, the Senate’s bill, like the one passed by the House, would allow states to decide which benefits insurance must cover. This could herald a return to pre-Obamacare days, when Americans who bought their own insurance faced expensive riders for coverage such as mental-health care, maternity care and addiction treatment. Any changes to which benefits insurance must cover is expected to have an outsized impact on people with pre-existing medical conditions.

The bill would also slash Medicaid, a program that pays for half of all births in the United States, and which provides health insurance to one in five Americans. If passed, changes in the Senate bill would be some of the most significant to the health system for low-income Americans in more than 50 years.

The bill would change Medicaid in two ways. First, it would phase out payments to states that expanded Medicaid under Obamacare between 2020 and 2023, a major cut to the program.

Second, the bill would change Medicaid from a program that matches states’ contributions, no matter the spending, to one with a capped budget called “per capita” spending.

The House bill – which used similar mechanisms to cut Medicaid – would have slashed $800bn from the program, and would push 14 million people off Medicaid, according to analysts.

As states look for ways to save money, they could be pushed to cap levels of spending on individual recipients, affecting costly beneficiaries like elderly and disabled people.

Some especially vulnerable populations could also see major changes to their healthcare. An estimated 220,000 people recovering from addiction depend on Medicaid for drug treatment, an analysis by the left-leaning Center for Budget and Policy Priorities found. That could worsen America’s opioid overdose crisis, which killed more than 50,000 Americans in 2016.

Planned Parenthood under fire

The bill would also prohibit Planned Parenthood from participating in Medicaid for one year, forcing hundreds of thousands of women to find a new source of reproductive healthcare.

Each year, about 1.6 million patients, mostly women, receive sexually transmitted infection tests, contraception and cancer screenings at Planned Parenthood through federal programs like Medicaid. Planned Parenthood, in return, receives roughly half a billion dollars annually in federal Medicaid reimbursements.

Republicans, though, object to funneling so much federal money to a major abortion provider.

The bill would also bar federal tax credits from paying for commercial insurance plans that provide abortion coverage. That provision could be especially problematic in states such as New York and California, where insurance plans are required to sell such coverage.

The loss of Medicaid funds would force Planned Parenthood – the largest family planning provider in scores of counties – to close many clinics. Republicans have argued that other community healthcare providers could pick up Planned Parenthood’s caseload. But public health experts are dismissive of this claim.

The provision to defund Planned Parenthood, however, may violate the rules for budget reconciliation legislation, and Republicans could be forced to scrap it.

Tax repeal

At the same time, the bill would repeal a number of taxes on the wealthy and on the healthcare industry. The bill also allows people to save more for health expenses in tax-advantaged savings accounts.

All told, the healthcare sector accounts for roughly one-sixth of the US economy. Approximately 20 million people gained insurance under Obamacare.

Almost half of Americans, about 155 million people or 49% according to the Kaiser Family Foundation, receive health insurance through an employer. The poor and the elderly, who use the public health insurance programs Medicaid and Medicare, represent about 34% of the population together.

Another group of people buy insurance on the “individual” market. This group makes up about 9% of the country who buy insurance through marketplaces set up by Obamacare.

The bill was negotiated behind closed doors between 13 Republican male senators representing 10 states – eight of which did not expand Medicaid. Senate majority leader Mitch McConnell has said he would like to vote on the healthcare bill before Congress leaves for the Fourth of July recess, at the end of next week.

In a floor speech on Thursday, McConnell said the bill had input from “many members” and promised that there would “ample time to analyze, discuss and provide thoughts” before it is brought to the floor for a vote. The Congressional Budget Office (CBO) confirmed it would publish its analysis of the bill’s impact early next week.

“After that, we will proceed with a robust debate and an open amendment process on the Senate floor – a process that I would encourage each of our 100 senators to participate in,” McConnell said.

Following McConnell to the floor, Chuck Schumer, his Democratic counterpart, said the legislation may be “meaner” than the version passed by the House last month. “The Senate Republican healthcare bill is a wolf in sheep’s clothing, only this wolf has even sharper teeth than the House bill,” he said.

Democrats vowed to continue to protest the bill on Thursday, disrupting routine order in the Senate to draw attention to their demand that Republicans hold a public hearing on the legislation.

Meanwhile, outside McConnell’s office, demonstrators including wheelchair users blocked a hallway, holding signs and chanting, before being removed by police.

Facebook Twitter Pinterest Capitol police carry out a demonstrator protesting outside Mitch McConnell’s office. Photograph: Michael Reynolds/EPA

Republicans can only afford to lose two GOP senators if they are to get the bill through the Senate. They are using a special budget process called reconciliation that allows them to bypass a Democratic filibuster.

On Thursday afternoon, four conservative members of the Republican caucus announced their opposition to the draft plan, imperiling its prospects of passing without crucial changes.

“There are provisions in this draft that represent an improvement to our current healthcare system, but it does not appear this draft as written will accomplish the most important promise that we made to Americans: to repeal Obamacare and lower their health care costs,” Senators Rand Paul of Kentucky, Mike Lee of Utah, Ted Cruz of Texas, and Ron Johnson of Wisconsin said in a joint statement.

But changing the bill to appeal to conservatives could repel moderates, such as Susan Collins of Maine and Lisa Murkowski of Alaska, who have already raised concerns about cutting Medicaid and repealing certain consumer protections.

Senator Lindsey Graham of South Carolina had accurately predicted the legislation’s fate earlier on Thursday, saying: “I think we’re probably going to get a lot of pushback from people from the right in the House.”

As senators take time to read the bill, most for the first time, Republicans are insisting that that the proposal is a starting point and far from a done deal.

“It’s truly a draft,” said Senator Bob Corker of Tennessee. “I’m not that superficial to say I support or don’t support a bill I haven’t read.”

Sign up for the Minute email. Catch up on today’s US politics news in 60 seconds