At long last, Republicans have unveiled a plan to replace Obamacare.

To do so, they will need nearly every Republican vote.

But the move to cut back Obama’s Medicaid expansion will trigger a fierce debate in Congress. Some republicans so not want Medicaid cuts.

The draft legislation, which would roll back many of the core tenets of Barack Obama’s government-led health care legacy, was released by Republican lawmakers who have struggled to bridge internecine divisions as they craft a bill for the president.

The legislation will provide a starting point for bartering among Republicans, most notably in the Senate, but it is far from certain to win enough GOP support to pass Congress and reach Trump’s desk.

The plan from House Republicans abolishes Obama’s requirement for every American to buy health insurance or pay a penalty, replacing it with a new system of tax credits designed to encourage people to buy affordable insurance.

Unlike subsidies offered under Obamacare, those tax credits would be determined by the individual consumer’s age instead of their income.

The party is seeking to repeal Obamacare using a budget process that would enable them to proceed without any Democratic support, but it requires near total Republican unity.

The House plan would also cut back the expansion of the Medicaid health program for low-income Americans that was part of Obama’s signature healthcare scheme, a proposal that is anathema to some Republican senators.

On Monday four Republican senators — Rob Portman of Ohio; Shelley Moore Capito of West Virginia; Cory Gardner of Colorado*; and Lisa Murkowski of Alaska — sent a letter to Senate leader Mitch McConnell urging him to reject any bill that cut back Medicaid.

Under the House repeal bill, Obama’s Medicaid expansion program would continue only until 2020.

The bill retained two popular elements of the Obamacare reforms that Trump said he wants to keep — the ability for young adults to stay on their parents’ insurance plans and a ban on insurers denying coverage to people who are already unwell.

Democrats have already launched a vocal attack on the plan, which they say is likely to leave more Americans uninsured, particularly low-income individuals who had benefited from the expansion of Medicaid.

Budget Reconciliation

Recall that Obamacare passed in a budget reconciliation process over strenuous Republican objection. Amusingly, What Goes Around, Comes Around.

Broad legislation to repeal and replace Obamacare would require 60 votes in the Senate, and Republicans don’t control enough seats to make that happen or to squash a filibuster by the Democrats.

Instead, Republican lawmakers are expected to use the budget process, which is limited to provisions that affect federal revenues and spending and requires only a simple majority to pass. It would enable Congress to repeal the Obamacare mandates that individuals have coverage and that companies with 50 or more employees provide workers with affordable insurance. Also, it can do away with the federal subsidies, eliminate funding for Medicaid expansion and cancel a multitude of Obamacare-related taxes.

Medicaid Stickler

Medicaid is a huge problem. Something needs to be done to control the beast. But four Republicans do not want to see it cut.

Given that the replacement bill keeps many Obamacare provisions if it also keeps Medicaid, how much reform are we really talking about?

50 Votes Needed

A Filibuster is out.

Given Vice President Mike Pence would cast a tie-breaking vote, the Republicans need only muster 50 votes to replace the beast.

Republicans can afford to lose precisely two Senate votes and no more. But four Republican do not want to cut Medicaid.

Age-Based Subsidies

The plan to have age-based subsidies rather than income-based subsidies is interesting. That provision will appeal most to boomers not quite at Medicare levels.

But what will it cost? We have no details.

 

I suspect a compromise will win over two of the needed votes. But will the new plan work much better?

Many more details are needed. And there are a lot more questions than answers.

Meanwhile, I present once again: Rand Paul’s “Obamacare Replacement Act” vs. Mish Health Care Proposals.

Mike “Mish” Shedlock