Senate leaders worked Monday to modify their plan to overhaul the Affordable Care Act, adding a new provision that would penalize consumers for not keeping their plans by imposing a six-month waiting provision before they could re-enroll.
Senate Majority Leader Mitch McConnell (R-Ky.), who is hoping to win over a handful of Republicans before bringing the proposal to a floor vote later this week, has been conferring with colleagues behind closed doors to see which provisions could bring them aboard. But some of the targeted measures already in the bill have prompted a backlash, with critics arguing they could reduce health coverage that some Americans now enjoy.
In a sign that the bill remains a work in progress, leaders added a couple of new provisions Monday aimed at providing a stronger incentive for younger and healthier Americans to maintain health insurance. The new language says consumers that went without insurance for 63 days or more in the prior year would face a six-month waiting period before coverage begins.
The provision aims to satisfy insurers and minimize the number of Americans who may drop their plans if the bill becomes law.
When the ACA, widely known as Obamacare, was negotiated, insurers were wary that they would for the first time be compelled to accept all customers, healthy and sick, without being able to charge more to people with preexisting medical issues — or even deny them coverage. The industry accepted that new burden on the condition that the law also for the first time required most Americans to have health coverage — meaning that insurers could count on getting healthy new customers as well as ones whose medical problems made them more expensive to insure.
Like the conservative health-care bill passed last month by the House, the Senate’s version would end that insurance mandate in 2020. The House’s legislation would replace the mandate with a subtler form of encouragement for people to keep buying insurance: permission for health plans to charge 30 percent more for a year to customers who have let their coverage lapse.
The Senate version lacked such a deterrent, and that prospect has unnerved the insurance industry, whose leaders worry consumers will postpone buying coverage until they got sick and needed care. That sort of behavior would drive up costs and prices.
But this change could spark renewed criticism from groups that represent people with serious illnesses. Someone who is just diagnosed with cancer or MS, for example, could face grave health consequences if they have to wait for a plan to kick in before seeking costly treatments.
The American Cancer Society’s deputy chief medical officer, J. Leonard Lichtenfeld, testified before the House Energy and Commerce Committee in January that a range of reasons could lead to people having a gap in coverage, including a divorce or the death of a spouse when one spouse is covered on the other’s health plan. In addition, he said people with cancer may lose their jobs when they fall ill, and lose their plan as a result.
“Penalties imposed on people in these situations may adversely impact access to care, interrupt life-saving treatment and make insurance unaffordable when they attempt to regain coverage,” Lichtenfeld said.
Other measures, which were part of the original bill but are now facing intense scrutiny, have also raised questions.
One provision that spells out how the Medicaid program could be converted to a block grant, for example, would allow states to spend any leftover money on an item“that is not related to health care,” as long as they meet “quality standards” set by the Health and Human Services. The state must also ensure that it is spending as much on health care as it has in previous years.
Dee Mahan, who directs Medicaid Initiatives for the advocacy group Families USA, said in an interview that the measure, which is not in the House version of the bill, could allow states to play “a shell game with Medicaid money … doable on a much larger scale than it was intended for.”
She noted that in April, after Florida received a $1.5 billion authorization from federal officials to fund program paying hospitals for charity care known as the low income pool, Florida Gov. Rick Scott (R) suggested spending hundreds of millions of dollars on a dike upgrade and tourism promotion.
The language waives a prohibition in the Social Security Act, which bars federal payments to be made “with respect to any amount expended for roads, bridges, stadiums, or any other item or service not covered under a State plan under this title.” Congress has sought on several different occasions to bar these kinds of transfers, which Sen. Charles E. Grassley described in a 2008 hearing as “a scam.”
The question of what meets “quality standards” is left to the HHS secretary, and it is unclear if the department needs to issue a rule or can opt for more informal guidance, which is not subject to the same sort of public comment and response process.
Separately, the leaders included language that aims to mollify Sen. Lisa Murkowski (R-Alaska), who has questioned the bill’s impact on people in her state who gained insurance under the ACA’s expansion of Medicaid. The public insurance program traditionally covers low-income, elderly and disabled Americans along with children and pregnant women. Under the 2010 law, 31 states and the District of Columbia have expanded Medicaid to include able-bodied adults earning up to 138 percent of the federal poverty level, leading to the coverage of another 11 million people.
The bill calls for a transfer of Medicaid funds from states that provide more generous benefits, such as New York and California, to those that do not. But it says this transfer “shall not apply to any state that has a population density of less than 15 individuals per square mile,” which applies to just five states, Alaska, Montana, North Dakota, South Dakota and Wyoming.
Medical costs in Alaska are particularly high, in part because so many people there live in remote areas.
Andrea Callow, Family USA’s associate director of Medicaid Initiatives, described that part of the bill as “a transfer from wealthy, Democratic states to Republican states.”
Spokespeople for Murkowski and McConnell did not respond to questions about why that provision was included in the measure. Murkowski has voiced skepticism of the way in which the bill has been crafted in recent weeks, and she has not signaled support for it.
Senators and aides in both parties are eagerly awaiting the release of the nonpartisan Congressional Budget Office’s report on the bill, which could come as soon as Monday. Not only is CBO expected to forecast how the bill would impact coverage levels and what it would do to the cost of premiums, it will also measure the bill’s impact on the federal budget deficit, giving leaders a sense of how much money they have to work with when they consider 11th hour adds to try to appease the concerns senators have expressed.
For example, GOP Sens. Rob Portman (Ohio) and Shelley Moore Capito (W.Va.) have been seeking a dedicated $45 billion fund to treat opioid addiction. Sen. Ted Cruz (R-Tex.), meanwhile, has been pushing to eliminate more ACA regulations and allow people to buy insurance policies across state lines.
Still, some remain skeptical that there is enough time to absorb the bill, make substantive changes to it and also hold a final vote, as McConnell is aiming to do this week.
“We’re not going to be able to make the changes to the bill if we’re forced into a vote this week,” said Sen. Ron Johnson (R-Wis.) in a Monday interview with conservative radio host Hugh Hewitt. “We just don’t have time.”
Johnson, like Cruz, has said he does not support the draft of the bill that McConnell released Thursday.
Despite such criticism, Senate GOP leaders are putting increasing pressure on the rank-and-file to swiftly rally behind the bill this week. Senate Majority Whip John Cornyn (R-Tex.), who previously voiced openness to voting on health care in July, wrote on Twitter Monday that he was “closing the door” on delays. “We need to do it this week before double digit premium increases are announced for next year,” he added.
Amy Goldstein contributed to this report.