- The Senate has released the working draft of the Better Care Reconciliation Act of 2017, revising the recently House-passed AHCA. Both bills aim to repeal and replace the Affordable Care Act (ACA), which was passed in 2010.
The AHCA contained many unpopular provisions and drew the ire of dozens of national healthcare organizations and patient advocacy groups.
The Senate’s bill offers revisions to the AHCA passed by the House, and includes the following key provisions:
An increased reliance on waivers that would offer states flexibility to work around any remaining ACA mandates and insurance regulations, the majority of which would already be eliminated.
The bill does include protections for people with pre-existing conditions, by preventing insurers from increasing premiums or denying coverage based on pre-existing conditions.
The individual mandate would be eliminated as well as the employer mandate. Under the ACA, individuals are required to acquire health insurance and larger employers are required to offer affordable plans to their employees. The provision allowing children under the age of 26 to remain on their parents plan remains intact.
Premium subsidies for health insurance exchanges
The Senate plan maintains ACA income based subsidies for individuals who purchase plans on the health insurance exchanges for 2018 to 2019. After that date, it would tighten qualifying income requirements for individuals. This includes earnings 100 to 400 percent of the poverty level down to 100 to 350 percent of the poverty level.
The bill will continue cost sharing reductions (CSR) until their elimination in 2020. The funds are paid to insurers to defray premium costs for low income members.
State stabilization fund
The bill supports the AHCA move to establish a stability fund to cover expenses incurred by states when stabilizing their health insurance exchanges. This includes funding to establish high-risk pools. The senate bill proposes $112 billion to reimburse insurers who incur extensive losses from high-cost members.
The bill also creates a $62 billion long-term state innovation fund designed to help high-cost and low-income people buy health insurance.
Medicaid’s current system of open-ended matching federal funds would end in 2021 and be moved to a block grant. This would cap Medicaid spending for participating states, and would also tie future funding to inflation, which is lower than proposed in the AHCA. Medicaid cuts would be spread over a longer time period, but result in greater defunding for the long term.
The legislation would also end state Medicaid expansion after three years. States that had not expanded by the deadline would receive decreased Medicaid funding beginning in 2021.
The bill also allows the establishment of work requirements for those receiving Medicaid, except for the elderly, pregnant woman, and the disabled.
All ACA taxes would be repealed, including those on medical device manufacturers, insurers, and the nation’s top two percent of income earners.
The legislation also suspends Cadillac tax on high-end employer health plans through 2025.
Actuarial value decrease
Current ACA benchmark plans require insurers to cover 70 percent of medical costs. The Senate plan would reduce that to 58 percent.
To read the proposed bill in its entirety, click here.