Senate Considers Changes to House-Approved Health Care Bill

Published May 31, 2017

The U.S. Senate is considering removing provisions from the House-approved version of the American Health Care Act (AHCA) to retain parts of Obamacare the House voted to repeal.

The U.S. House of Representatives narrowly passed AHCA, 217 to 213, in May after canceling a vote on an earlier version of the bill in March that lacked support from conservative and centrist Republicans.

The House-approved bill would repeal the individual and employer mandates of the Affordable Care Act (ACA), which require individuals to buy health insurance, or else pay a penalty, and require employers with at least 50 full-time employees to provide them with health insurance.

The House bill would allow states to opt out of ACA’s community rating and essential health benefits (EHB) mandates, pending approval by the Department of Health and Human Services. Community rating requires insurers to charge healthy and sick customers the same price for plans. EHBs are services not everyone needs that insurance plans must cover anyway.

Upper Chamber Deliberates

Republican senators have expressed varying degrees of support for AHCA since the House passed the bill on May 4.

“I congratulate the House,” Sen. Lamar Alexander (R-TN), chairman of the Senate Health, Education, Labor and Pensions Committee, said in a floor speech after the House vote. “In the Senate, we will carefully review the House bill, and now we’ll go to work on a Senate bill.”

That same day, Sen. Rand Paul (R-KY) told Fox News host Neil Cavuto, “It’s going to take a little bit of work to get me to a ‘yes’ vote, but I do have an open mind.”

Dr. Robert Graboyes, a senior research fellow and health care scholar at the Mercatus Center at George Mason University, says AHCA cannot replace what it does not repeal.

“[T]he AHCA, passed by the House on May 4, would not likely be an effective ACA replacement,” Graboyes said. “The AHCA amends the ACA but leaves the law’s superstructure largely intact.”

The House version of AHCA probably won’t survive in the Senate, Graboyes says.

“It seems likely that the Senate will gut the House bill and create its own alternative,” Graboyes said.

Mandates Could Stay

Senate Finance Committee Chairman Orrin Hatch (R-UT) says a Senate Obamacare replacement bill could restore ACA’s individual mandate, which fines individuals the greater of $695 or 2 percent of their income for not buying health insurance.

“I don’t mind the individual mandate being expanded,” Hatch told The Hill on May 17. “But it all comes down to budgetary concerns and how it’s going to be written.”

Linda Gorman, director of the Health Care Policy Center at the Independence Institute, says congressional Republicans are reneging on campaign promises to repeal ACA.

“A lot of Republicans who campaigned on Obamacare repeal clearly don’t want to do it,” Gorman said.

States beholden to the federal government for funding of Medicaid expansion programs are unlikely to change the status quo, Gorman says.

“Essential health benefits [are] up to the state, which means up to the Medicaid bureaucracy, because the states live in mortal fear that they might have to actually pay [more] for their Medicaid programs,” Gorman said.

Delivery and Supply

Graboyes says AHCA fails to remove regulations that keep health care costs high and inefficient.  

“Looking at the bigger picture, the AHCA, like the ACA, barely touches the biggest problems in American health care,” Graboyes said. “The Medicare reimbursement methodology locks older technologies and practice patterns in place. Plus, Medicare incentivizes overspending and remains a fiscal time bomb for the federal government.”

Regulations restrict competitors from offering innovative medical treatments and opening new facilities, Graboyes says.

“The Food and Drug Administration’s drug-and-device-approval methods slow the introduction of new products, [and] hospitals are shielded from efficient competitors by a variety of federal and state laws,” Graboyes said.Until we deal with these other problems, we will fall short of what should be our goal: better health for more people at lower cost, year after year.”

Lawmakers erroneously fixate on paying for expensive health care instead of on making it cheaper, Graboyes says.

By focusing nearly all attention on the demand side, both parties have limited their ideas to redistribution of existing health care resources, and redistribution yields winners and losers,” Graboyes said. “Real solutions—plural—are far more likely to come from the supply side, meaning changing the actual delivery of care.”

State Solutions Available

State lawmakers have the authority to repeal many restrictions blocking health care innovation, Graboyes says.

“Much of the action ought to occur at the state level,” Graboyes said. “Numerous state laws and regulations impede the supply of care and the development and introduction of new means of delivering care.”

States do not need permission from Congress to pass reforms to lower health care costs and expand access, Graboyes says.

Areas ripe for reform include licensure of physicians and other providers, corporate practice of medicine restrictions, scope of practice, certificate of need, telemedicine, direct primary care, and loads of other areas,” Graboyes said. “In many or most cases, the states are free to implement such reforms without waiting for permission from the federal government or a new federal health care law.”

Matthew J. Bolduc ([email protected]) writes from Washington, DC.

Internet Info:

Robert Graboyes, “Analysis: Real Health Care Reforms Pass the ‘Calendar Test,'” Health Care News, May 2017:

Matthew Glans, “10 Health Care Reform Options for States,” Research & Commentary, February 1, 2017:–commentary-10-health-care-reform-options-for-states

Chris Jacobs, “Summary of Repeal and Replace Amendments,” Chris Jacobs on Health Care, May 4, 2017:

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