GOP Senators Reveal Affordable Care Act Replacement Plan

Yesterday morning, Senate Republican leaders released their replacement plan for the Affordable Care Act (ACA). The Better Care Reconciliation Act (BCRA) of 2017 would repeal many of the components of the ACA, including taxes, Medicaid, and tax credits for Americans purchasing individual insurance.

The BCRA would also provide additional funding to stabilize insurance marketplaces and may cut funding for clinics that provide certain women’s reproductive services, according to Business Insider.

However, the Senate bill has several differences from the House-approved American Health Care Act (AHCA). These changes may result in tensions between lawmakers when drafting a compromise bill, which must be done before it reaches the desk of President Donald Trump.

As with the first version of the AHCA, conservative legislators may feel that the BCRA does not repeal enough of the ACA, while moderates may be concerned over cuts to Medicaid.

Senate Majority Leader Mitch McConnell (R-KY) previously said that he hopes to have a vote by the end of next week, leaving lawmakers with a little over 1 week to review the legislation. This bill can only afford to lose 2 Republican votes to pass, according to the article.

Review what was included in first and second drafts of the American Health Care Act.

What is Included in the Better Care Reconciliation Act of 2017?

The new bill would make changes to tax credits. Under the BCRA, individuals would receive tax credits based on income level, which deviates from the House bill that proposed an age-based system.

The legislation would limit eligibility for tax credits to those earning up to 350% of the federal poverty level, while the ACA capped it at 400%, according to the article. Tax credits would also only cover 58% of costs.

The BCRA would also provide subsidies through 2019 to help lower-income Americans offset their healthcare costs. This initiative may provide insurers with an incentive to participate in 2018 marketplaces and may even reduce premiums, since more individuals would likely purchase coverage with financial assistance, according to the article.

The Senate bill would also phase out Medicaid expansion starting in 2020 over a period of 3 years. In this regard, the House bill was more generous, as it allowed states to keep the expansion before eventually losing funding.

While reversing expansion would save money, it may cause millions of individuals who earn up to 100% to 138% of the federal poverty limit to lose coverage, according to the article.

Additionally, for Medicaid, the BCRA includes the House’s implementation of capping funding for the program. After 2025, growth in spending would move from consumer price index (CPI) for medical care to the CPI for all goods, which could mean less funding for the program, according to Business Insider.

The legislation would allow states to apply for a waiver to opt out of the essential health benefits, which was mandated by the ACA. This was incorporated into the House bill, but the BCRA would not allow for waivers that would repeal community rating, which requires insurers to charge the same for individuals of the same age in the same location.

Repealing essential health benefits would likely drive down premium increases, but poses the risk of higher out-of-pocket costs.

Like the AHCA, the BCRA would repeal a tax of 3.8% on investment income for individuals earning more than $200,000 per year. This change would not affect a majority of Americans.

The Senate bill would also reallocate funding away from healthcare providers who perform abortions by requiring money to go through the Children’s Health Insurance Program, which is already subject to the rule, according to the article.

While the Senate bill appears to be more generous than the House bill, it must be viewed favorably by all GOP Senators to pass. The bill received a positive opinion from the Centers for Medicare & Medicaid Services.

“Today, Obamacare is in a death spiral and millions of Americans are being negatively impacted as a result. They are trapped by mandates that force them to purchase insurance they don’t want and can’t afford,” Seema Verma, CMS administrator, said in a press release. “The Senate proposal is built on putting patients first and in charge of their healthcare decisions, bringing down the cost of coverage and expanding choices. Congress must act now to achieve the President's goal to make sure all Americans have access to quality, affordable coverage.”