The House bill contained a fatal flaw. Its flat tax credits would price millions of near-elderly low-income workers out of the insurance market and trap millions more in poverty. Fortunately, buried in the House bill was a way out. Section 202 of the bill contains a transitional schedule of tax credits that was meant to serve as a bridge between the old Obamacare system and the new Paul Ryan system. If you simply kept that bridge in force, and got rid of the flat tax credit, you’d solve the problem with the House bill. By making that change, the near-elderly working poor would be able to afford coverage, and the poverty trap would be eliminated. And that’s precisely what the Senate bill did! Section 102 of the Senate bill—the Better Care Reconciliation Act of 2017—closely mirrors Section 202 of the House bill, with age- and means-tested tax credits up to 350% of the Federal Poverty Level.
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Senate Republicans released their draft bill to repeal and replace ObamaCare on Thursday, and Majority Leader Mitch McConnell is hoping for a vote next week. The binary choice now is between pushing past the media and Democratic flak to pass a historic achievement, or wilting under the pressure and ratifying the ObamaCare status quo.
The bill is an imperfect compromise between moderate and conservative Republicans, and it makes pains to accommodate different interests and the Americans, states and businesses that have adapted to ObamaCare over the years. The center-right nature of the details means the Senate won’t be ushering in some free-market utopia. But the reform is a major improvement over the U.S. health-care status quo that will worsen if the bill fails.
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Senate aides expect that Majority Leader Mitch McConnell (R., Ky.) will bring the health bill as soon as Tuesday, shortly after the Congressional Budget Office has scored the bill. Both chambers have to pass the exact same bill, and there are a few ways for that to happen. The quickest option would be for the House to take up and vote on the Senate bill, but it’s not yet clear if there is enough support in the House to pass it. If they did, it would go straight to the White House. The House could also tweak the Senate bill and send it back to the Senate, which would have to vote on the modified bill. Or GOP leaders in both chambers could put together a group tasked with forging a compromise between the House and Senate bills. The new compromise bill would then have to be approved by both the House and Senate.
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The new Senate bill 1) Reduces the number of people eligible for subsidies, reduces the values of the premium subsidies, and lowers the cap on total subsidy expenditure; 2) Eliminates the individual and employer mandates; 3) Restricts coverage for abortion; 3) Ends the cost-sharing reductions — but not before paying insurers back for the money they’ve already laid out; 4) Gives states a great deal more flexibility in the waiver program; 5) Gets rid of a lot of Obamacare taxes; 6) Provides market stabilization funds; 7) Winds down the Medicaid expansion funding, but not as fast as the House bill; and 8) Converts Medicaid to a per-capita allotment rather than an open-ended entitlement.