Everything You Need To Know About the Senate’s ObamaCare Repeal and Replace Bill (the Better Care Reconciliation Act of 2017 Explained)
The bill was just released today, so we need time to do a full review. With that in mind the Senate plans to vote on the bill on Monday (so it will be useful to have the basics in the meantime).
The bottom line: This is ObamaCare-lite with less assistance. It offers less cost assistance and less access to Medicaid, and as a trade-off offers lots of tax breaks. It also lays the groundwork for defunding Planned Parenthood and places restrictions on plans offering abortion coverage. It is less generous than ObamaCare in almost all respects (with the exceptions being that there is no mandate and those making less than 100% FPL can get tax credits). Meanwhile, it is more generous than the House bill by some measures (for example cost assistance based on income) and less generous by others (for example deeper cuts to Medicaid). So compared to the House bill, it is a mixed bag, but compared to ObamaCare, it is less generous by most measures (to everyone except specific high earners and industry).
- Tax credits: The House Bill called for tax credits based on age, ObamaCare offered tax credits based on income. Meanwhile the Senate bill keeps ObamaCare’s income-based tax credits but adjusts them for age (it is a hybrid). With that said, the Senate bill is less generous than ObamaCare in a few ways. Under the Senate bill, those earning up to 350% of the poverty level are eligible for credits. Obamacare’s cap is 400%; the House bill notably offered credits to those earning up to 600%. The result here is that the Senate bill offers more assistance to older Americans than the House bill. Like the House bill and unlike ObamaCare, it extends credits to 0% – 100% of the poverty level; which is good. However, poorer Americans and those making over 350% of the poverty level get no assistance.
- Medicaid expansion: Obamacare’s Medicaid expansion is phased out over four years under this bill. 90% of the current federal funding would be provided in 2020, and it would decrease by 5% each year until 2023, after which it would be eliminated. People would not be allowed to join the expansion from 2020 onwards. In other words, it freezes expansion as the House bill did. On the plus side, tax credits will be available to people that fall off the expansion because there is no cut-off at 100% FPL. This means millions will lose access to coverage, and millions more who would have been covered in the future won’t be; the change happens more slowly than it did with the House bill.
- Medicaid spending: The Senate bill retains the House’s per capita cap for federal Medicaid spending. After 2025, however, growth in spending would shift from the consumer price index for medical care to the CPI for all goods, a lower level of growth. That means states will get less funding for Medicaid in general (not just expansion) and then rates will continue to decline after 2025. This is a bigger cut than was in the House bill.
- Ratios: The Senate bill will allow older Americans to be charged a 5:1 ration (five times more than younger Americans) like the house bill. ObamaCare is 3:1. This means lower income seniors not yet on Medicare could see substantial increases to their costs.
- Work requirements: The bill allows states to set up work requirements for Medicaid. That means you have to be working or seeking work to get Medicaid in states that opt-in to this.
- Cost-sharing subsidies: Cost-sharing subsidies would be extended to 2019. This means those who depend on cost sharing assistance for those making between 100% of the poverty level and 250% is kept until at least 2019. The House bill cut this completely, so the Senate bill is a slight improvement. Uncertainty about cost-sharing has been causing instability in the markets and is contributing to a 19% projected increase in 2018, so some certainty is good here.
- State waivers for Obamacare regulations: States will be able to waive essential health benefits (benefits from 10 essential categories like maternity care and mental health). The house bill allowed for this too. However, the Senate bill won’t allow states to repeal the community rating provision mandating insurers not to raise premiums based on health status, medical claims, gender, or most of the other factors that they used when setting rates in the past. In other words, those with preexisting conditions will be better protected than they were under the House bill.
- Tax Cuts: Both the House and Senate bill cut most of ObamaCare’s taxes such as the Medical device tax, taxes on drug makers, the mandates. It cuts the mandate to get coverage and the mandate to offer full-time employees coverage as well as the 3.8% tax on investment income on people earning an annual income above $200,000. In other words, this bill cuts hundreds of billions in taxes (mostly benefiting the wealthy), and it cuts the mandate for employers to cover workers’ medical insurance or pay a fee. Notably, it also cuts the individual mandate.
- The continuous coverage provision? The House bill charged 30% more for a year if a person didn’t get coverage (a continuous coverage provision). It seems they have struck this from the Senate bill. Unless I’m missing something, there won’t be a fee for failing to get coverage or for re-entering the market.
- Abortion and Planned Parenthood: No plans purchased using funding from the bill are permitted to cover abortions. It says “the term ‘qualified health plan’ does not include any health plan that includes coverage for abortions.” Unlike the ACA, there is no “charge a dollar more” for plans that cover abortions. Additionally, none of the funds allocated by the bill can be given to healthcare providers providing abortion. In other words, nobody who uses cost assistance can get coverage for abortions. The bill also effectively defunds Planned Parenthood with these provisions by blocking them from taking Medicaid payments.
- Small business tax credit: The House bill cut the small business tax credit. It seems this version keeps it.
- UNVEILED: THE SECRET SENATE HEALTHCARE BILL <– a very useful Business Insider article we used as a reference.
- The Better Care Reconciliation Act of 2017 (AKA TrumpCare AKA the Senate ObamaCare bill)