Senate Majority Leader, Mitch McConnell, on Thursday unveiled H.R. 1628 – the Better Care Reconciliation Act of 2017. The bill, crafted by 13 republican senators, will now be reviewed by the full Senate. Majority Leader McConnell has announced a plan to hold a floor vote on the bill next week after budgetary and procedural scorekeeping reviews are completed.
While the Senate proposal is similar to the House-passed American Health Care Act, there are key differences:
- Medicaid: Medicaid expansion funding is continued to 2021. Federal funding is reduced through 2023, with final phase out by 2024. The Senate keeps the House plan to change Medicaid funding to lump sum block grants or based on the number of enrollees but caps payments at the medical component of the CPI starting in 2020 and further lowers them to the standard CPI rate beginning in 2025. This would cause states to cut enrollment, benefits or provider payments.
- Tax credit subsidies: The Senate proposal maintains ACA premium subsidies, but eligibility criteria is reduced from 400% of the poverty level (annual income of approximately $47,520) to 350% (annual income of approximately $41,580). Subsidies would be available to people below the poverty level in states that did not expand Medicaid. Subsidies would also be tied to Bronze level plans, which covers about 58% of health care costs rather than the more generous Silver level plans, which cover about 70% of medical costs. Fewer people would qualify for subsidies, payment for coverage is reduced and adults between 59 – 64 could pay five times more than younger people.
- Pre-existing conditions: All applicants must be accepted regardless of health status, and insurers cannot charge higher premiums to those with pre-existing conditions. States can be permitted to reduce coverage of “essential health benefits” giving insurers flexibility in plan design. The House version permits higher premiums for some pre-existing conditions, allows certain people to be excluded, and provide federal funding for states to establish high risk pools.
- Cost-sharing subsidies: Federal payments to insurers to help people with deductibles and copayments would continue until 2019. Otherwise, companies had planned to leave the federal exchanges for 2018 or raise their rates substantially.
- Taxes and mandates: The Senate bill eliminates all of the ACA taxes except for the “Cadillac tax” on high cost employer health plans. That tax is further postponed until 2026. All penalties on individuals and employers who do not obtain or provide insurance coverage are eliminated.
- Coverage for dependents: ACA provisions for children to remain on the parents’ insurance plan until age 26 are retained. (New Jersey law permits children to remain on their parents insurance until age 31).