Blue Cross Blue Shield of WNY
CapitalHill_1



Senate Republican Better Care Reconciliation Act 

Background

  • On May 4, 2017, the House of Representatives passed The American Health Care Act (AHCA) by a vote of 217-213. 
  • Since that time, Senate Republicans have revised the bill to address concerns after public backlash towards the AHCA and its Congressional Budget Office (CBO) score.
  • On June 22, 2017, the Senate Committee on the Budget released the Better Care Reconciliation Act (BCRA).
  • On June 26, 2017 the CBO released an estimate of the direct spending and revenue effects of the revised Senate bill. The CBO estimated that enacting this legislation would reduce the cumulative federal deficit between 2017-2026 by $321 billion. That amount is $202 billion more than the estimated net savings for the AHCA. CBO reports BCRA would increase the number of people who are uninsured by 22 million in 2026 relative to the number under current law, (slightly fewer than the increase in the number of uninsured estimated for the AHCA).

     

Current Status

  • Senate Republican leadership’s goal was to move forward with the BCRA with a floor vote before the July 4th recess.
  • After seven Republican Senators expressed serious concerns and an unwillingness to vote for the BCRA legislation as is, leadership delayed the vote until after the recess.
  • All indications are that the Senate will significantly amend the bill and resend it to the CBO for a new score post-July 4, 2017.

     

Medicaid

  • The draft would phase out federal funds for Medicaid expansion over three years – which is slower than the House-passed measure.
  • Starting in 2021, enhanced federal payments would be rolled back over three years to traditional Medicaid funding rates. 
  • Thirty-one states and Washington, D.C., have expanded their Medicaid programs under the Affordable Care Act (ACA) – including New York State. 
  • Senate Republicans would let states choose an eight-quarter period between 2014 and September 2017 for calculations to base for future Medicaid payments, which gives states some flexibility in influencing their baseline. 
  • States also would have the option of seeking Medicaid block grants in a provision similar to the House bill.

     

Insurance Tax Credits

  • The ACA tax credits, which are available to people between the poverty level and four times that threshold, would be continued for two years.
  • Beginning in 2020, the Senate measure would adjust these tax credits for purchasing insurance for age, income and geography - which the House bill would not do.
  • Unlike the House bill, the Senate proposal contains funding for cost-sharing payments for insurers through 2019, but then repeals them.
  • The draft bill would provide $50 billion between 2018 and 2021 for a short-term fund to help stabilize marketplace insurance.
  • That includes $15 billion in 2018 and 2019 and another $10 billion in 2020 and 2021 for the Centers for Medicare and Medicaid Services administrator to fund arrangements with insurers and states.
  • The Senate draft also a long-term state innovation fund, $62 billion over eight years, to help high-cost and low-income people buy health insurance.

     

Taxes

  • The bill would eventually repeal most of ACA’s taxes, including the surtax on high earners investment income and a Medicare Hospital Insurance surtax.
  • It would also end some industry taxes, such as those on medical devices and health insurers. The health insurance tax was suspended in 2017, but will add roughly 3% onto premiums as it returns for 2018.

     

Individual and Employer Mandates

  • The Senate draft would repeal the individual and employer mandates that require the purchase of insurance or face a penalty for not doing so included in the ACA.
  • Unlike the House bill, it would not penalize people, via a surcharge, who let their coverage lapse.
  • The AHCA included a 30% surcharge on premiums for people that dropped coverage for more than 63 days over a 12 month period, but the BCRA omitted that provision at first.
  • After the original bill was released, Senate leadership amended the bill to include a six month waiting period for coverage if an individual drops coverage for more than 63 days over a 12 month period, a provision similar to Medicare’s enrollment requirements.

     

Pre-existing Conditions

  • The Senate bill also allows states to opt out of some of ACA’s insurance regulations, but it does not allow waivers that would let insurance companies charge higher rates to people with preexisting conditions. It remains to be seen if any states would apply for such opt outs.
  • The draft would allow children to stay on their parents’ health insurance through age 26.

     

News and Media

August 3, 2017:
Senators Plan Bipartisan Hearings On Health Care

Dave Anderson, CEO of HealthNow New York, talks with Steve Inskeep about lawmakers' plans to hold bipartisan hearings on health insurance exchanges. NPR's Scott Horsley has details and analysis.

 

June 6, 2017:
What's next for the American Health Care Act

The Point of Health podcast features Donald Ingalls, Vice President, State and Federal Relations of BlueCross BlueShield of Western New York. The episode covers the latest updates on Republican's efforts to repeal and replace the Affordable Care Act.

 


Need to understand a term?

View our helpful Health Care Reform Glossary to understand frequent terms and definitions.

 

Need more information?

Contact us: 
reformquestions@bcbswny.com