By Alexander Bolton - 02-22-17 06:00 AM EST
The most divisive issue for Senate Republicans when it comes to repealing and replacing ObamaCare is what to do with Medicaid.
The Affordable Care Act gave states the option of accepting federal funds to expand Medicaid, the healthcare program for the poor and disabled. Millions of people gained health insurance after 31 states - including many with Republican governors - decided to accept the deal.
Repealing ObamaCare would end the Medicaid expansion, cutting federal funds to all of those states.
Some Republicans want to save the expansion at least through a transition period during which states would continue to get additional federal funds.
Others, including lawmakers from states that didn't take the expansion, say all of ObamaCare has to go, with no long, costly transition period for Medicaid.
The fact that some states took the expansion and others didn't provides a dividing line that will pit Republicans against one another.
Sen. John Thune (R-S.D.) calls it the single thorniest issue of the entire debate.
"You don't want to punish or penalize states that didn't expand [Medicaid], but the states that did expand are going to say, 'We don't want to get punished for expanding, either.' To me, that's probably the thorniest and most difficult issue to resolve," said Thune, the chairman of the Senate Republican Conference.
Twenty Republican senators represent states that expanded Medicaid under ObamaCare, which the federal government subsidized entirely for the first three years of the expansion. Many want to keep the federal subsidies providing for the expansion.
Thirty-two Senate Republicans represent states that opted out of the Medicaid expansion. Many of them don't think it's fair for states that opted in to keep getting federal help.
It's a bigger fight in the Senate than in the House, where the GOP last week unveiled a proposal to roll back federal subsidies for Medicaid. The House plan does not specify when this would happen.
If states want to keep the Medicaid expansion, House policymakers say they will have to find the money themselves. If they cut back, they say, low-income individuals and families would be eligible for a new, yet-to-be-specified refundable tax credit to buy private insurance.
Ohio Gov. John Kasich, a Republican, said the House proposal "means phasing out coverage."
"That is a very, very bad idea, because we cannot turn our back on the most vulnerable," he told CNN's "State of the Union."
Nearly 620,000 people in Ohio were made eligible for Medicaid under ObamaCare.
Sen. Rob Portman (R-Ohio) says he wants to make sure that constituents who received new health coverage through Medicaid don't lose it.
He and Sen. Shelley Moore Capito (R-W.Va.) have met with Republicans from other states that agreed to the Medicaid expansion.
Medicaid and the Children's Health Insurance Program, which covers low-income minors, cover 29 percent of West Virginians. That's the highest percentage of any state, according to the Kaiser Family Foundation.
"Sen. Capito is committed to ensuring that there is a stable transition when ObamaCare is repealed to avoid any gaps in coverage and ensure those currently covered by the Medicaid expansion are protected and retain access to healthcare," said Amy Graham, a spokeswoman for Capito.
Sen. Chuck Grassley (R-Iowa) took fire from constituents angry about possible cuts to ObamaCare during a town hall meeting in Iowa Falls on Tuesday.
Grassley insisted that the 11 million new people who signed up for Medicaid under the 2010 law will still "be able to get the subsidy," according to video of the meeting provided by American Bridge, a pro-Democrat advocacy group.
He said either states would subsidize the expanded enrollment or "there will be a refundable tax credit for low-income people."
But just how the refundable tax credit would work has yet to be fully understood by many GOP lawmakers, and it's unclear whether it would be enough to buy insurance covering the same services as Medicaid.
Controversy over repealing the Medicaid expansion erupted among Senate Republicans two years ago when they passed legislation under special budgetary rules at the end of 2015.
Senate Majority Leader Mitch McConnell (R-Ky.) brokered a deal at the time to ease the concerns of colleagues such as Portman and Capito by proposing a two-year transition period to end the Medicaid expansion.
The stakes were lower then, because everyone knew President Obama would veto the bill.
President Trump is expected to sign the ObamaCare repeal measure into law, meaning whatever the Republican Congress does now is likely to become reality.
Sen. Steve Daines (R), whose home state of Montana also agreed to the Medicaid expansion, is floating a four-year transition period to a new safety net for low-income families.
"As [Vice President] Mike Pence said, we need to have a soft landing and not too long a runway. I'm actually tossing out a four-year kind of transition right now, but to really give the states the power there of how they want to spend money," Daines told The Hill.
That kind of talk rankles conservatives such as Kentucky Sen. Rand Paul (R). Though his state adopted the Medicaid expansion, he's adamantly opposed to "partial" repeal plans.
"One thing we were unified on about a year ago when we voted was complete repeal," he said. "That's all some of us are going to vote for.
"There's still division. There are some people who want to keep part of ObamaCare," he said.
Peter Sullivan contributed.