Republicans Clash Again Over Senate Health-Care Bill

By Kristina Peterson, Richard Rubin and Siobhan Hughes Features Dow Jones Newswires

New divisions opened among Senate Republicans on Thursday over their proposed health-care legislation even as they edged closer to hammering out some agreements to shore up support for the bill.

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The bill's status appeared shaky as lawmakers left Washington for a week-long break, its fate likely vulnerable to home-state pressures they may face and any deals they can make over the vacation.

The new fights revolved around a group of Republicans who said they were open to preserving the Affordable Care Act's 3.8% tax on investment income, and a Congressional Budget Office report on the bill that said the government would spend 35% less on Medicaid in 2036 than under the Affordable Care Act, likely forcing states to take steps to curb the program.

Senate Republicans had hoped to rewrite their health-care bill by Friday. That way, the CBO would have time to evaluate the new version while lawmakers are away for the July 4 recess. The continued disputes made that an increasingly unlikely scenario.

The tax position cuts to the heart of longstanding Republican orthodoxy in opposition to such taxes, and conservative senators quickly condemned the idea. GOP Sens. Bob Corker of Tennessee, Mike Rounds of South Dakota and Marco Rubio of Florida said they were open to it.

"We're repealing Obamacare, so the assumption would be that we would get rid of the taxes, too," said Sen. John Thune (R., S.D.), the third-ranking Senate Republican. "But if it takes something like that to get our members on board to move this process forward, I think we have to consider that."

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Conservative Republicans said the move would amount to an abdication of pledges they had made to voters to repeal as much of the 2010 health care law as possible.

"I don't remember anybody going around saying, 'Oh, except for these job-killing tax increases,'" said Sen. Pat Toomey (R., Pa.). "So I expect that we'll be repealing all the taxes."

Under the current House and Senate bills, the investment tax would be repealed retroactively for income received in 2017. The tax applies to capital gains, dividends, interest and certain passive business income for individuals with income over $200,000 and married couples with income over $250,000.

Leaving the tax in place would give Republicans two potential benefits as they try to put together a health-care bill that can attract 50 of their 52 members, with Vice President Mike Pence casting a potential tie-breaking vote.

First, it provides up to $172 billion over a decade that Republicans can use to make health insurance more affordable to low-income households. Second, it could blunt attacks from Democrats that the bill undermines health care for the many in exchange for tax cuts for a few.

Democrats said Thursday that preserving that tax wouldn't offset the bill's other problematic provisions, including $772 billion in cuts over 10 years to federal funding for Medicaid, the government health-insurance program mainly for the poor.

"The capital gains tax was particularly egregious, but trimming around the edges doesn't do anything to change the basic structure of this bill, which is it's a massive cut to Medicaid and does nothing to fix the challenges of the current law," said Sen. Brian Schatz (D., Hawaii).

Further roiling the waters was the report from the nonpartisan CBO, which looked at the Senate bill's impact after 2026 and came amid stepped-up criticism of the CBO from the White House. That built on private grousing among Republicans for weeks that they were fighting a losing battle if they tried to change the bill to win a more favorable coverage assessment from CBO.

The agency has found that the 22 million fewer Americans would have health insurance in 2026 under the Senate bill compared with the number who would be covered then by the Affordable Care Act.

Two senior administration officials told reporters that while they didn't question the office's professionalism or intentions, the Congressional Budget Office's primary role was estimating budgetary effects of legislation -- not behavioral decisions that could drive insurance enrollment.

Republicans senators did appear to notch progress on some less-contentious elements of the bill Thursday. Sens. Rob Portman (R., Ohio) and Shelley Moore Capito (R., W.Va.) have pressed to boost funding for opioid addiction treatment to $45 billion from the $2 billion currently in the legislation. Lawmakers and aides said the bill was now likely to include significantly more opioid funding.

"I'm optimistic on the opioid funding, but I haven't had anything finalized yet," said Ms. Capito. Even if it were, she said, it wouldn't be enough to win her support for the bill. "I'm not there yet," said Ms. Capito, who has also worried about Medicaid cuts.

In a closed-door lunch on Thursday, Senate Republicans discussed a change sought by conservatives to allow people to use money stashed in tax-advantaged health-savings accounts, or HSAs, to help pay their insurance premiums.

GOP leaders are also working to see if there is a way to incorporate a proposal from Sen. Ted Cruz (R., Texas), backed by other conservatives, that would allow insurers who offer at least one plan that meets ACA requirements to also offer a cheaper plan covering fewer benefits.

Senate leaders said they wanted to make sure such a provision wouldn't result in costs spiking for older and sicker people.

"In the interest of giving people more options and more freedom to get the policy they want, there's some value in what he's trying to put forward," Mr. Thune said. "But it's got to be workable."

Lawmakers also said they had also discussed the idea of boosting the amount of money in the bill's stability fund, designed to prop up the shaky individual market, where people can buy health insurance if they don't get it through work or a federal safety-net program.

Senate GOP aides said they would continue negotiations over the recess in hopes of unveiling a revised draft shortly after lawmakers return the week of July 10. Giving the time to review any new draft, the Senate might not vote on the bill until mid-July.

Stephanie Armour and Louise Radnofsky contributed to this article.

Write to Kristina Peterson at kristina.peterson@wsj.com, Richard Rubin at richard.rubin@wsj.com and Siobhan Hughes at siobhan.hughes@wsj.com

(END) Dow Jones Newswires

June 29, 2017 18:37 ET (22:37 GMT)