What May Be in the Senate's Health Bill

By Stephanie Armour Features Dow Jones Newswires

The Senate health bill is still a work in progress, with no official text yet. The Senate's Republican leadership has been hammering out the bill behind closed doors, so there has been scant information about the legislation.

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But its outline so far is said to resemble a more expansive version of the legislation passed last month by the House.

The bill preserves the House's essential goal: replacing the Affordable Care Act with a new system based on tax credits and cuts to Medicaid. But Republican senators are still grappling, according to Hill aides and sources familiar with the negotiations, over a number of central questions.

Medicaid

The Senate bill would phase out the enhanced federal funding for new enrollees in the 31 states that expanded Medicaid under the ACA, but there is disagreement over how long that phasing out should take. Some lawmakers are looking at three years beyond the House deadline of Jan. 1, 2020, and others favor seven years beyond that date.

Medicaid funding to states would change from a guaranteed federal matching rate to a per capita cap, which in time would mean less federal funding. Conservatives are pressing for a more restricted growth rate in spending that would mean deeper cuts.

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A possible compromise may be a longer off-ramp for phasing out Medicaid expansion funding in return for tighter per capita caps.

Refundable tax credits

The plan retains the House GOP's idea of providing tax credits to people who don't get insurance on the job. The Senate is looking at enhancing the credits for people who are low-income, older or living in high-cost areas.

Cost-sharing subsidies to insurers

Senators are considering a measure that would provide $10 billion a year in 2018 and 2019 to offset the cost to insurers of reducing out-of-pocket health costs for low-income consumers on the ACA exchanges. The goal is to stabilize the market until new provisions in the Republican health overhaul take effect. A number of insurers have said they would have to raise premiums or leave the exchanges in 2018 without this funding. It's still unclear if this measure would meet Senate procedural rules.

Market stabilization

Senators are weighing $15 billion in both 2017 and 2018 for state grants to help provide coverage for consumers with high medical costs. This would likely mean restructuring the funding provided in the House bill to help states stabilize their insurance markets.

Opioid addiction treatment

The bill would include additional funding to help states battle the opioid crisis, a demand of some centrist Senate Republicans.

Taxes

A number of ACA taxes may be retained, depending on how provisions are scored by the Congressional Budget Office, which provides a nonpartisan analysis of the legislation's costs and coverage. The Senate bill must save $133 billion under a procedural rule in order to pass with a simple majority.

The bill could preserve the ACA's so-called Cadillac tax, a levy on generous employer health plans. That tax has been suspended by Congress, and under the Senate bill it might not take effect until 2026. Retention of this tax is vigorously opposed by employer groups.

The bill also could include a sales tax on health insurance and an excise tax on certain medical devices. The taxes are largely needed to pay for additional spending in the Senate bill, such as beefed-up tax credits.

Write to Stephanie Armour at stephanie.armour@wsj.com

(END) Dow Jones Newswires

June 15, 2017 17:12 ET (21:12 GMT)