Divisions sharpened Wednesday between hard-right and more pragmatic Republicans over a strategy for repealing and replacing the Affordable Care Act.
One of their biggest disagreements is over the future of the ACA's expansion of Medicaid coverage to more than 10 million low-income adults.
Those differences—along with the apparently slow progress in drafting actual legislation that could be scored by the Congressional Budget Office on cost and coverage impact—underscore the struggle Republicans face while dismantling Obamacare and establishing an alternative system. House GOP leaders promise, however, that they'll soon have a bill they can pass before the Easter recess in April.
On Wednesday, leaders of the very conservative House Freedom Caucus, joined by Sen. Rand Paul, demanded that congressional Republicans quickly repass their 2015 budget reconciliation bill on a straight party-line vote to repeal most of the ACA.
They touted Paul's Obamacare Replacement Act, a bill which almost certainly would leave millions of people currently covered under the ACA uninsured, as their alternative. Rep. Mark Sanford has introduced a companion bill in the House.
The 2015 repeal bill would erase federal funding for the Medicaid expansion after two years. Asked whether the nearly 40 House Freedom Caucus members would work with Senate Republicans on maintaining some form of Medicaid coverage for those who have received it, Rep. Mark Meadows, the caucus chairman, ruled that out. He said his members want to repeal the expansion entirely and offer health savings accounts to help that low-income population.
Meanwhile, Senate Republicans lunched with newly confirmed HHS Secretary Tom Price, hoping to learn that the Trump administration has a concrete plan that would erase the ACA while maintaining affordable coverage for the 20 million people who have gotten it under the current law. But that's not what they heard.
After the lunch, Sen. Mike Rounds of South Dakota was asked if Price said the administration was developing a bill. Rounds said the secretary promised that the administration would work with Congress on legislation, and that it was making ACA repeal and replacement a top priority. Rounds predicted that crafting legislation would likely take another two months, and the transition to a new system would last two to three years.
Rounds sounded a very different note on Medicaid expansion than that expressed by Paul and the Freedom Caucus. Rounds said there was discussion during the lunch with Price of equalizing federal Medicaid contributions between the 31 states that have expanded Medicaid and the 19 that have not, including his own state. But the governors of the expansion states would resist taking away the expansion money that has provided coverage to so many of their residents, and that could derail the replacement plan, he explained.
Sixteen states that have expanded Medicaid have Republican governors, including Arizona, Arkansas, Indiana, Iowa, Kentucky, Michigan, Nevada and Ohio. They are represented by nearly 20 Republican senators.
"I'm from a state that has an expanded Medicaid population that I am very concerned about," Republican Sen. Shelley Moore Capito of West Virginia said in December. "I don't want to throw them off into the cold.”
Some Senate Republicans say they want to take more time to craft an ACA replacement bill that maintains the law's popular consumer protections and offers comparable coverage levels. Sen. Lamar Alexander, chairman of the Senate Health, Education, Labor and Pensions Committee, told Bloomberg News this week that his panel is not planning to repass the 2015 repeal bill.
The replacement bill offered by Paul and Sanford likely will not satisfy Alexander or even House Speaker Paul Ryan. It proposes a non-refundable $5,000 tax credit to help people afford coverage. But lower- and middle-income people who owe less than $5,000 in income tax would not receive the full amount, and those who owe no tax would receive no financial assistance.
In contrast, proposals by Ryan and Price, who previously served as a congressman from Georgia, would provide a refundable, age-based tax credit, which would offer the same premium subsidy to everyone regardless of income.
On Wednesday, Paul argued that it's unacceptable to offer a refundable tax credit similar to the ACA's. Instead, he said, his approach would create a “real marketplace” that would drive down prices for medical services and that help lower-income people better afford healthcare.
Meadows rejected more moderate Republican reform approaches such as a bill introduced by Sens. Bill Cassidy and Susan Collins to let states decide whether to keep the ACA insurance structure or switch to a more conservative model. That bill would retain the ACA's taxes to finance the replacement coverage. Meadows warned the Cassidy-Collins bill would “institutionalize Obamacare.”
He urged rapid action on repealing the ACA to clear the way for the Republicans' next priority, a tax package to sharply reduce rates for wealthier Americans and businesses. “We have to get it done because we can't start tax reform until we deal with this,” he said.
Rounds expressed optimism about the healthcare reform discussions among congressional Republicans, saying legislation “is starting to gel.”
But that was not obvious from listening to the very different messages Wednesday from Republicans on the opposite ends of the Capitol.
“There's no question we'll see a repeal-and-replace bill,” said Michael Leavitt, Utah's former Republican governor and HHS secretary under George W. Bush, in an interview. “But how do you define repeal and replace?”