WASHINGTON -- Senate Republicans unveiled their latest pitch to repeal and replace the Affordable Care Act on Thursday.
After more than two weeks spent reworking the bill -- known as the Better Care Reconciliation Act (BCRA) -- is similar to the first, with some exceptions: some ACA taxes on wealthy individuals would remain and insurers would be allowed to sell "skinny" plans.
These and other changes appear aimed at increasing the number of people with health coverage, compared with previous versions, and to quash persistent criticism from the left that the bill cuts taxes for the wealthiest Americans, while gutting coverage for the poorest.
Unlike the first BCRA, the amended version would continue the net investment income tax, the additional Medicare Health Insurance Tax, and a tax on high-earning health insurance executives.
The new bill also earmarks another $70 billion for state-based reforms to help patients pay for out-of-pocket costs such as cost-sharing or health savings accounts (on top of the $112 billion in the original bill).
Other provisions would allow individuals to use their health savings accounts to pay for premiums and use tax credits to pay for high-deductible "catastrophic" plans prohibited in the ACA. And the bill would set up a fund to help insurers cover "higher risk individuals" with plans that maintain certain ACA protections and offer "sufficient minimum coverage." Lastly, the revised bill earmarks $45 billion for opioid abuse prevention and treatment.
The inclusion of the amendment sale of cheaper coverage plans that exclude high cost services, was inspired by an amendment from Sen. Ted Cruz (R-Texas) and Sen. Mike Lee (R-Utah) who argued such changes would reduce premiums while increasing consumer choice.
Much like the preceding draft legislation, the revised Better Care Reconciliation Act would eliminate the individual and employer mandates, transform Medicaid from an entitlement to a capped allotment, and provide income-based tax credits for low-income individuals to help pay for health insurance. However, subsidies would be linked to the median level insurance, which are plans with a lower actuarial value (meaning insurers would cover a smaller portion of payments).
The new bill retains the original BCRA's outline for Medicaid, including the sharp cuts to the program's overall budget from currently projected levels and its reversal of the ACA's Medicaid expansion.
But the bill does make some tweaks to the original's Medicaid provisions:
- Recalculates Disproportionate Share Hospital payments in a state based on the number of uninsured rather than the number of Medicaid enrollees.
- Allows states to apply for waivers for extending or enhancing community based services for the aged, blind, and disabled
- Allows states to include the Medicaid expansion population under a block grant
- Subtracts state medical assistance expenditures in a portion of the state from the calculation of a per capita cap or block grant during the event of a state emergency
The initial BCRA and the new version began to phase out the Medicaid expansion over a 3-year period beginning in 2021 by reducing the enhanced match rates that were intended to attract more states to expand.
Like the original BCRA, the revised version also caps the amount of federal dollars provided to state Medicaid programs using a block grant or per-capita cap mechanism. Under a per-capita allotment states would receive an aggregate amount of dollars based on a tally of the expected cost of an individual in a particular eligibility category and the number of such beneficiaries, per category (e.g. elderly, disabled). The amount would increase annually by a set growth factor. States that exceed the capped spending amount, would see those dollars subtracted from their allotment the following year.
(See ľֱ's "Eye on Repeal/Replace" series for an explanation and debate on block grants and per-capita caps.)
The combined impact of rolling back the Medicaid program and dramatically scaling back federal payments would result in roughly $770 billion in cuts to the program and approximately 15 million fewer enrollees over a 10 year period, according to the Congressional Budget Office. (That figure has been , however.)
Doug Badger, a senior fellow at the conservative Galen Institute, highlighted what he saw as benefits of the Senate bill, citing the expansion of ACA-style tax credits to uninsured individuals living below the poverty line in non-expansion states, as the most significant provision.
The revised bill injects an additional $70 billion in grants to states “to enrich coverage†for these low-income individuals, which Badger explained is “essentially cost sharing reduction assistance†to help with copayments, coinsurance and deductibles.
“Instead of being provided to insurers it’s being provided to states,†he said.
This starts to make the tax credits for 4 million individuals currently uninsured in non-expansion states “more meaningful,†Badger concluded.
He also applauded a revision to the Medicaid program overhaul that would exempt areas at times of public emergencies, from being unfairly weighted in the per-capita formula.
Others took a less rosy view.
“The new bill, even more so than the old bill, has the potential to fragment the risk pool,†said Michael Chernew, PhD, director of the Healthcare Markets and Regulation Lab in the Department of Health Care Policy at Harvard ľֱ School in Boston, blasting the “Cruz-Lee amendment.â€
“Health insurance is not like most insurance in that, in health insurance, it really matters who else is purchasing the product… If you allow people to buy the product that’s best for them, the products that are available to everyone else will change,†he said.
Insurers need a balance of healthy and sick people in broad risk pools and offering high-deductible catastrophic plans, with increased flexibility and product offerings, makes those risk pools harder to stabilize, he noted.
The push for catastrophic plans also garnered a sharp rebuke from America’s Health Insurance Plans (AHIP), which noted in a memo that individuals with pre-existing conditions could find comprehensive coverage harder to afford, .
Two liberal policy scholars , Stan Dorn and Sara Rosenbaum, argued that some of the new bill’s language represents a “massive expansion in federal power over state budgets,†by giving the Secretary of Health and Human Services broad discretion in setting individual states’ Medicaid allocations.
Dorn and Rosenbaum also noted that the new bill would end retroactive Medicaid eligibility for individuals who need care while they are in the process of applying but have not yet completed the paperwork.
Others criticized the infusion of $45 billion in opioid funding.
Bruce Siegel, MD, MPH, president and CEO of America’s Essential Hospitals, said, such funding was “far short†of what was needed, in a press statement, noting that spending targeting low-income income individuals “pales in comparison to the hundreds of billions of dollars this bill would drain from Medicaid by ending expansion and imposing spending caps.â€
One right-leaning policy scholar took a 30,000-foot view.
The revised version of the bills shows Republicans are “scrambling,†said Tom Miller, a resident fellow of the American Enterprise Institute, a conservative think tank.
“This has nothing to do with philosophical, principled healthcare reform. They are out on a limb and they’ve got to buy their way back from the limb,†he said, of the GOP Senate’s leadership.
This shows that when backed into a corner, even fiscally conscious Republicans are ready to spend if it allows them to achieve a specific policy results, Miller concluded.
The $45 billion in funding to help fight the opioid epidemic was clearly a tactical decision intended to shore up votes from fence-sitting Republicans in hard-hit states such as Sen. Rob Portman (R-Ohio) and Sen. Shelley Moore Capito (R-W.Va.).
The fact that the Medicaid cuts appear intact is likely to hurt the possibility of a vote from Sen. Susan Collins (R-Maine), Sen. Lisa Murkowski (R-Alaska) or Sen. Dean Heller (R-Nevada), whose states have expanded Medicaid.
Finally, it's unclear whether the revision will bring in those including Sen. Rand Paul (R-Ky.) who have demanded nothing short of a full ACA repeal.
“Unless something is dramatically changed [Sen.] Rand Paul is voting against this bill. [Sen.] Susan Collins is voting against this bill,†Miller said. Somewhere from 6 to 10 others still “would like a better deal,†he estimated, giving the bill a “less than 50-50†chance of passage.
“From the outside looking in,†Badger is also “not optimistic they can get to 50 votes.â€
Adding to the uncertainty, two other GOP hold-outs -- Sen. Bill Cassidy (R-La.) and Sen. Lindsey Graham (R-S.C.) -- released an alternative plan that continues many Obamacare taxes and directs money to states to control healthcare, according to .
Republicans can afford to lose only two of their 52 votes if the bill is to pass.