Source: Senate leaders to offer $200 billion to win over moderates

Source: Senate leaders to offer $200 billion to win over moderates
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In a bold move to revive their healthcare bill, Senate Republican leaders are getting ready to propose giving $200 billion in assistance to states that expanded Medicaid, according to a person familiar with internal Senate negotiations.

The huge sum would be funded by leaving in place ObamaCare’s net investment income tax and its Medicare surtax on wealthy earners, according to the source briefed on the proposal.

The figure is likely to outrage conservatives, who would prefer to use the savings from the Senate healthcare bill to pay down the deficit.

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The source said the aid would be targeted primarily at Medicaid expansion states, adding it would be distributed on “the back end” of the bill’s timeline, when the legislation would phase out the generous federal contribution for expanded Medicaid enrollment — a central pillar of ObamaCare.

The goal is winning the support of wavering moderate Republicans who will make or break the legislation: Sens. Rob PortmanRobert (Rob) Jones PortmanLongtime tax aide leaving Senate Finance Committee Ex-McConnell policy aide joining lobby firm WATCH: Sen. Flake: “More doubtful” North Korean summit will happen  MORE (R-Ohio), Lisa MurkowskiLisa Ann MurkowskiOvernight Health Care — Sponsored by PCMA — VA reform bill heads to Trump's desk Senators introduce bill to measure progress in opioid fight Dems win nail-biter in charity congressional soccer game MORE (R-Alaska), Shelley Moore CapitoShelley Wellons Moore CapitoPa. health secretary: 'Sustainable funding' needed to attack opioid crisis Senate panel unanimously approves water infrastructure bill The Hill's Morning Report — Sponsored by PhRMA — How long can a Trump-DOJ accord survive? MORE (R-W.Va.) and Dean HellerDean Arthur HellerKennedy retirement rumors shift into overdrive McConnell: Midterms will be 'very challenging' for GOP Singer Jason Mraz: Too much political 'combat' in Washington MORE (R-Nev.). 

A spokesman for Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellSenators introduce bill to overhaul sexual harassment policy The Hill's Morning Report — Sponsored by PhRMA — Republicans see some daylight in midterm polling Exclusive: Bannon says Rosenstein could be fired 'very shortly' MORE (R-Ky.) declined to confirm or deny the pending offer, as has been the leader’s practice of not commenting on negotiations.

President Trump promised senators at a White House meeting Wednesday that he is prepared to spend tens of billions of dollars more to address their concerns but spoke in only general terms.

“The president said today we’re prepared to put money at things,” said a senator from a Medicaid-expansion state who attended the lunch.

The $200 billion proposal, however, was not discussed at a meeting hosted Wednesday evening by Sen. John BarrassoJohn Anthony BarrassoSenate panel unanimously approves water infrastructure bill Senate GOP urges Trump administration to work closely with Congress on NAFTA Watchdog to probe EPA email preservation MORE (Wyo.), the Republican Policy Committee chairman, according to a lawmaker who participated. 

The windfall for Medicaid expansion states would come on top of a proposal that Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, made to moderate GOP senators at a lunch meeting at the White House on Wednesday.

Verma told nervous senators from Medicaid expansion states that the administration would be willing to give states flexibility to use Medicaid funds to subsidize the healthcare costs of people not enrolled in the entitlement program.

The so-called Medicaid wraparound would give states a way to help low-income people who don’t qualify for traditional Medicaid if they end expanded enrollment because of a reduction in federal funding.

The wraparound would allow states to draw from Medicaid to subsidize the costs of low-income people with high premiums and deductibles. 

That money would come in addition to $132 billion the revised bill already sets aside for a long-term state innovation fund and $45 billion to treat opioid addiction.

Low-income people could also use refundable tax credits to pay for insurance premiums under the revised Senate proposal.

But moderates were not initially sold on Verma’s Medicaid proposal, in part because it raises the question of whether it would stretch the program too thin since the bill also includes hundreds of billions in cuts. 

“I think it’s best to sum it up as: it’s complicated. It will have differing impacts depending on where each state is respectively,” Murkowski said after Wednesday’s meeting.

Plowing an extra $200 billion in federal assistance to Medicaid expansion states could shore up any funding shortfall in case traditional Medicaid funding, the long-term innovation fund and the tax credits prove inadequate.