A group of Republican senators are fighting desperately to preserve health coverage for millions of low-income constituents that have benefited from Obamacare. And the president of their own party seriously undercut their negotiating position with his budget Tuesday.
By proposing hundreds of billions of dollars in Medicaid cuts in combination with the House-passed healthcare bill’s more than $800 billion in Medicaid spending reductions, President Donald Trump is effectively throwing in with fiscal conservatives looking to constrain the program’s growth and wind down its coverage as quickly as possible. And that could be perilous for more than a dozen GOP senators who have been meeting for months over how to preserve the law’s benefits.
“Anytime you’re cutting Medicaid, you’re obviously endangering a lot people in my state,” said Sen. Shelley Moore Capito of West Virginia, a state that’s benefited dramatically from the Medicaid expansion under Obamacare.
Added Sen. Bill Cassidy of Louisiana, another expansion state: “I suspect when President Trump said he wouldn’t cut Medicaid and that he was going to continue coverage, that maybe the folks who drafted this budget didn’t … review his campaign contract to the American voter.”
The Senate Republicans’ work on repealing Obamacare is pitting senators from expansion states like Capito and Rob Portman of Ohio against fiscal conservatives, mostly from non-expansion states. At issue is how abruptly to roll back an initiative embraced by Republican governors that covered 11 million people and cap federal funding for a program that covers 70 million total low-income Americans nationwide.
While Trump’s budget request won’t be enacted by Congress, it is an important sign of his administration’s priorities as the Senate GOP works to draft a bill that can garner the support of 50 of the Senate’s 52 Republicans. And on Tuesday, the White House tilted strongly toward the caucus’ right flank, including Sens. Ted Cruz (R-Texas) and Pat Toomey (R-Pa.), who want to enact steeper Medicaid spending reductions than even the conservative healthcare bill passed by the House last month.
“We have some strong views … among our members already on what the House did on Medicaid. People who want to go farther and some who don’t want to go that far,” said Sen. John Thune (R-S.D.), the No.3 GOP leader. “I’m sure [Trump’s budget] reinforces the argument that conservatives are making.”
The Trump administration’s blueprint for Medicaid goes beyond simply reinforcing conservatives’ bid to fundamentally reshape the program. It wholeheartedly embraces the roughly $839 billion in Medicaid cuts included in the House GOP’s repeal legislation, and then layers a whole new level of reductions on top of that.
The budget plan incorporates provisions in the House bill that would end Medicaid’s entitlement status and cap its funding for the first time, shifting it to a system that awards fixed amounts to states to help run their programs. But the White House is also adding a brand new restraint: A stricter limit on how fast that funding can grow over time.
“We go another step further and ratchet down the growth rates that are assumed,” Office of Management and Budget Director Mick Mulvaney said Monday.
The limitation would drain the program’s funding by as much as another $610 billion, the White House estimates. It’s not clear how much of that would overlap with the House bill’s cuts. Still, the proposal would go far beyond even some of the most ambitious proposals floated so far for shrinking the program.
Indeed, several fiscal conservatives said that Trump’s Medicaid vision was more in line with their ideas on the Obamacare repeal bill. “I’m for slowing down the growth of all government,” said Sen. Rand Paul (R-Ky.)
“It’s like all government programs, they continue to expand beyond what you’ve contemplated,” said Senate Finance Chairman Orrin Hatch (R-Utah). “I don’t want to pull the rug out from under people but I think we’ve got to have a system that has some sense to it.”
The Republican Party’s fight over Medicaid could ultimately determine whether or not the GOP can actually repeal Obamacare after years of talk. The House bill’s proposal to cut off the expansion by 2020 and constrain spending growth in future years spurred a group of senators from Medicaid states to begin meeting in secret months ago to plot plans to counteract the House’s harsh cuts.
The Republicans in that group could choose to issue a recommendation to the conference as a bloc on how much they are willing to roll back Obamacare’s Medicaid expansion and how much to cut spending, according to people working directly on the issue. Portman and Sen. Cory Gardner (R-Colo.) are also in the Senate GOP leadership’s 13-person working group, advocating for more generous Medicaid benefits than hardliners like Cruz and Toomey, who is from a Medicaid expansion state but prefers rolling back the expansion quickly and slashing future spending on it.
“I’m working with Rob. I’m obviously in that camp,” said Sen. John Hoeven (R-N.D.). Asked if he disagrees with the president’s budget approach on Medicaid, he responded: “Yes. Because it follows the House bill. And I don’t agree with the House bill.”
And those senators are speaking directly to their governors to figure out just how painful new restrictions on Medicaid spending could be. Sen. John McCain (R-Ariz.) discussed Trump and the House’s proposed Medicaid cuts this week with Gov. Doug Ducey (R-Ariz.) as soon as the budget leaked out.
“He’s very concerned, of course,” McCain said. “I want to be guided by a large degree by his assessment of the proposal.”
The White House pledged at the outset to let the Senate craft its repeal bill in peace, in a bid to avoid the deadline-setting and political intrusions that nearly doomed the House’s health care legislation. But the budget proposal may be seen by more moderate Republicans as Trump putting his thumb on the scale. Achieving the additional $610 billion in cuts would require preventing much of Medicaid’s funding from increasing faster than the rate of inflation each year, a position favored by the Toomey camp.
Portman and other centrists argue for a system that grows the pot of federal money more quickly, in hopes of keeping up with health care costs that often climb faster than other goods and services. They’re also concerned about losing money to fight opioid addiction.
“Obviously, I’m concerned about the additional cuts to Medicaid,” said Sen. Susan Collins (R-Maine), one of the chief GOP critics of the House repeal bill.
But while those parochial concerns would affect the healthcare of millions, the majority of GOP senators are less concerned. Nineteen states have not expanded Medicaid, and senators representing those areas are focused on cutting healthcare costs in general rather than preserving coverage for lower-income Americans who gained Medicaid insurance from Obamacare.
“It’s safe to say that there’s not a meeting of the minds in terms of what we’re trying to do with Medicaid,” said Sen. Ron Johnson, who hails from the non-expansion state of Wisconsin and wants to “devolve” Medicaid to the states. “I would rather in this effort focus on how do you constrain the costs of healthcare.”
Meanwhile, some key figures in the ongoing Senate debate shrugged off Trump’s budget as not indicative of where the Senate is heading on healthcare. Thus far, the Trump administration has been mostly hands-off on the chamber’s healthcare efforts, so some senators view the president’s budget document through that same lens.
“It’s just the president’s annual suggestion. If we see some good ideas in it we’ll use them,” said Sen. Lamar Alexander (R-Tenn.), who chairs a key health committee. “If we don’t, we won’t.”