Better Care Reconciliation Act of 2017
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The Better Care Reconciliation Act (BCRA) was released on June 22, 2017 as the Senate's version of the American Health Care Act, which was passed by the U.S. House of Representatives on May 4, 2017. The bill is a reconciliation bill, meaning it impacts the budgetary and fiscal provisions of the Affordable Care Act (ACA)—commonly known as Obamacare—and does not contain a provision to repeal the law in its entirety. The bill would repeal the individual and employer mandates, adjust the ACA's system of tax credits, and end the ACA's Medicaid expansion. Medicaid funding would also be converted from an open-ended entitlement to a per-member amount.[1]
On July 13, 2017, the Senate released a revised version of the bill that included changes such as $45 billion to address the opioid epidemic and allowing the sale of health plans that do not comply with ACA standards. Click here to read more about the revised bill.
How could the Senate bill be passed?
The Better Care Act is a reconciliation bill. Reconciliation bills primarily deal with changes in taxes or spending and can bypass potential filibusters in the Senate. Reconciliation bills can pass the Senate with a simple majority of votes (51-49) rather than the 60-vote threshold required to end a Senate filibuster. This means that Senate Republicans would need at least 50 votes to pass the bill, with Vice President Mike Pence casting the tie-breaking 51st vote.[2][3]
In the Senate, the Senate Parliamentarian rules on whether or not provisions of reconciliation bills meet the rules such bills are required to follow. On July 21, the Senate parliamentarian ruled that five provisions in the revised BCRA did not meet the rules of reconciliation:[4][5]
- the provision suspending funding for Planned Parenthood for one year
- the provision prohibiting the use of tax credits for plans that cover abortions in circumstances other than rape or incest or to save the life of the mother
- the provision appropriating funding for cost-sharing reductions
- the provision requiring insurers to enforce a six-month waiting period on coverage for individuals who could not prove that they'd had continuous health insurance for the previous 12 months
- the provision prohibiting New York from receiving federal reimbursement for Medicaid payments that counties make to the state
On July 25, 2017, the parliamentarian ruled that two more provisions do not meet reconciliation rules: the provision allowing insurers to charge older consumers premiums up to five times greater than those charged for younger consumers and the provision allowing small businesses to pool together to offer association health plans. Due to the rulings, these provisions would need 60 votes to remain in the bill. On July 27, 2017 the parliamentarian ruled that the provision changing the conditions for states to get waivers from ACA requirements did not meet reconciliation rules.[6][7]
Background
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On June 27, 2017, Senate Majority Leader Mitch McConnell (R-Ky.) delayed a vote on the bill until after the July 4 recess to give the party more time to negotiate on differences between the moderate and conservative wings of the party. Senate GOP leadership had previously expressed intent to vote on the bill by the July 4 recess. According to Axios, the new goal was to agree on a bill by June 30, send the bill to the Congressional Budget Office for a report, and vote on it following the recess.[8][9]
On July 11, 2017, following a briefing with GOP senators, McConnell delayed the start of the Senate's August recess to the third week in August in order to complete work on the BCRA and other items on the legislative agenda. A revised bill was released on July 13, 2017, and a vote was expected to be held the next week. On July 15, 2017, McConnell delayed the vote while Senator John McCain (R-Ariz.) recovered from surgery.[10][11]
At least four Republican senators said they would vote no on the revised version of the BCRA, which included the above provisions:
- Senator Rand Paul (R-Ky.): "I think it's worse...We were elected on a message of repeal, & this bill doesn't repeal ObamaCare."[12]
- Senator Susan Collins (R-Maine): "It is very likely I will vote no on the motion to proceed. The only thing that could change that is if the CBO analysis which comes out on Monday indicates that there would be far fewer changes in Medicaid than I believe there are now."[13]
- Senator Jerry Moran (R-Kan.): "This closed door process has yielded the BCRA, which fails to repeal the Affordable Care Act or address healthcare's rising costs. For the same reasons I could not support the previous version of this bill, I cannot support this one."[14]
- Senator Mike Lee (R-Utah): "After conferring with trusted experts regarding the latest version of the Consumer Freedom Amendment, I have decided I cannot support the current version of the Better Care Reconciliation Act. In addition to not repealing all of the Obamacare taxes, it doesn't go far enough in lowering premiums for middle class families; nor does it create enough free space from the most costly Obamacare regulations."[15]
On July 19, 2017, after GOP senators met with President Donald Trump in the White House to discuss healthcare, Senate leadership said that they would try to revive the Better Care Reconciliation Act of 2017 (BCRA)—or a version of it—in an attempt to repeal and replace the ACA. On the evening of July 25, 2017, the Senate rejected a procedural vote on the BCRA that included amendments to provide funding to help individuals in states that expanded Medicaid pay for deductibles and copays if they lost Medicaid coverage and to allow insurance companies to sell plans that did not meet the ACA's requirements. The vote was 43-57.[16][17]
Text of plan
The text below reflects the language of the Better Care Reconciliation Act as it was introduced.
Summary
On June 22, 2017, Senate Republicans released the Better Care Reconciliation Act (BCRA). The reconciliation bill, which would only impact the budgetary and fiscal provisions of the ACA, is the Senate's version of HR 1628, or the American Health Care Act (AHCA). Like the AHCA, the Senate bill does not contain a provision to repeal the law in its entirety. This section provides a summary of the bill as it was originally written.[1]
On July 13, 2017, the Senate released a new version of the Better Care Reconciliation Act. Click here to be taken to the section of the article that summarizes the changes in the revised bill.
Original bill
Individual and benefit mandates
The Better Care Reconciliation Act would, in effect, repeal the tax penalties on individuals for not maintaining health coverage and on employers for not offering coverage. The bill would not repeal the ACA's requirement that private insurers cover the 10 essential benefits outlined by the federal government, although states could obtain a waiver from this and other provisions (see below). The bill also does not repeal the bans on lifetime and annual benefit limits and insurance plans.[1]
Tax credits
Like under the Affordable Care Act, tax credits under the Better Care Act would be based on age, geography, and income. Starting in 2020, the bill would lower the upper-income threshold to qualify for tax credits from 400 percent of the poverty level to 350 percent. It would also remove the floor for tax credit eligibility—set at 100 percent of the poverty level under the ACA—meaning anyone earning incomes below 350 percent of the poverty level and ineligible for Medicaid could receive tax credits.[1]
The amount of tax credits an individual receives would be based on the difference between the premiums for the median cost benchmark plan and a percentage of the individual's income. The median cost benchmark plan is defined as one in an individual's area that covers 58 percent of costs and has a premium that is the median premium among those plans.[1]
Tax credits could not be used for plans that cover abortions except for those necessary to save the life of the mother or in cases of rape or incest. The health insurance exchanges would remain in operation, as well as the open enrollment and special enrollment periods.[1]
Insurance market rules and funding
Insurers would still be prohibited from denying coverage for pre-existing conditions. Insurers would also still be required to allow dependents to remain on their parents' insurance coverage until age 26. However, insurers would be allowed to charge premiums for older individuals as much as five times higher than for younger individuals; under the ACA, premiums for older individuals could only be three times greater. The bill also ends the federal requirement that health plans spend at least 80 percent of revenue on medical costs, as opposed to administration. States would instead be required to set their own requirements for health plan spending.[1]
The bill would provide $50 billion short-term funding between 2018 and 2021 to be issued to health insurers for health insurance market stability. The bill would also establish a long-term funding program to provide $62 billion to states between 2019 and 2026 to be used for the following purposes:[1]
- help cover the cost of high-risk individuals
- stabilize premiums
- promote participation in the health insurance market
- make payments to doctors for services
- help reduce out-of-pocket costs for those enrolled in individual plans
The bill would fund cost-sharing reduction reimbursements through 2019. The cost-sharing reduction program would end in 2020.[1]
Health savings accounts
The bill would raise the annual contribution limit to health savings accounts (HSAs) to the combined amount of the deductible and out-of-pocket costs for high-deductible health plans, which is set annually by the Internal Revenue Service. In 2017, high-deductible health plans had to have deductibles of at least $1,300 for an individual or $2,600 for a family. Out-of-pocket costs were limited to $6,550 for individuals and $13,100 for families.[1][18]
The bill would also allow owners of HSAs to withdraw funds for over-the-counter medications and would lower the tax penalty on withdrawals for unqualified medical expenses from 20 to 10 percent.[1]
Medicaid
The Affordable Care Act allowed states to expand eligibility for their Medicaid programs to childless adults earning incomes below 138 percent of the poverty level. Beginning in 2020, the bill would not allow any new states to expand eligibility for their Medicaid programs. For states that expanded their programs before March 1, 2017, the enhanced funding provided by the federal government for individuals eligible under the expansion would phase down through 2024. The phase-down schedule would be as follows:[1]
- the federal government would match 95 percent of state costs in 2017
- 94 percent of state costs in 2018
- 93 percent in 2019
- 90 percent in 2020
- 85 percent in 2021
- 80 percent in 2022
- 75 percent in 2023
Beginning in 2024, these states would receive funding for expansion enrollees at the same traditional match rate that covers other enrollees. States that expanded their programs after March 1, 2017, would not receive any enhanced funding; they would only receive funding for these enrollees at the traditional match rate.[1]
The bill would also convert Medicaid financing from an open-ended entitlement to a per-member amount. This amount would be adjusted based on five distinct groups:
- elderly individuals
- blind and disabled individuals
- children
- expansion adults
- other adults
The law would set a target spending amount for states based on spending during a past two-year period that the state chose. The amount allotted to a state would increase each year by the medical component of the consumer price index (CPI) plus 1 percentage point until 2025, then would increase by the CPI each year thereafter. Beginning in 2020, states that spent more than the targeted amount on their Medicaid programs in any given year would receive a reduced amount of funding the following year.[1]
States could also apply to receive their Medicaid funding in a block grant. The block grant would be capped based on the target per-member amount for the state multiplied by the number of enrollees and the percentage increase in the state's population over the previous two years. The block grant amount would be increased in subsequent years by the CPI for urban consumers.[1]
Under the bill, state Medicaid programs would no longer have to cover the 10 essential health benefits that private plans must cover under the ACA. States would also be allowed to include a work requirement for non-disabled, non-elderly, non-pregnant adults enrolled in Medicaid. Under current law, states must obtain federal approval to include a work requirement.[1]
Planned Parenthood
The bill would suspend federal funding to community health centers that provide family planning, reproductive health, and related medical services and that also provide abortions. This would include the nonprofit organization Planned Parenthood. The funding would be suspended for one year.[1]
Taxes
The bill would repeal most of the ACA's taxes, including the tax on over-the-counter medications, the tax on health savings accounts, and the tax on tanning services. The bill would keep the 40 percent excise tax on high-cost health plans, known commonly as the Cadillac tax, but would delay it until 2026.[1]
Waivers
The Senate bill would retain but amend the ACA's 1332 waiver program, which allowed states to obtain waivers to opt out of or amend the ACA's provisions, including, but not limited to, the essential health benefits, the health insurance exchanges, the individual and employer mandates, and the premium tax credits. The government could only grant waivers if state plans met the following conditions:[1]
- provided coverage that was at least as comprehensive
- provided coverage that was at least as affordable
- provided coverage to at least a comparable number of residents
- did not increase the federal deficit
The Senate bill changes the conditions that states must meet for waiver approval. Under the Senate bill, states would only be required to demonstrate that their plan would not increase the federal deficit.[1]
Summary of revised bill
September 14, 2017: Commenting on the apparent change of position among Republican senators who voted against Obamacare repeal, Senator Ben Sasse (R-Neb.) claimed, “With just one exception, every member of the Republican majority already either voted for repeal or explicitly campaigned on repeal.”
Is Sasse correct?
Read Ballotpedia's fact check »
On July 13, 2017, the Senate released a new version of the Better Care Reconciliation Act. The bill included the following differences from the original bill:[19]
- Any individual could purchase a catastrophic health plan (under the ACA, this is restricted to individuals under 30 or those who meet a hardship exemption).
- Tax credits could be used to purchase catastrophic plans.
- Individuals would be prohibited from using tax credits to purchase plans that cover abortions in cases other than rape or incest or to save the life of the mother.
- An additional $70 billion between 2019 and 2026 would be provided to states for individual market stabilization.
- The ACA's 0.9 percent payroll tax for Medicare would be retained.
- The ACA's 3.8 percent tax on investment income would be retained.
- Withdrawals from HSAs could be used to pay health insurance premiums.
- A total of $45 billion would be provided to address the opioid epidemic.
- Individual health plans in effect after January 1, 2019, would be required to enforce a six-month waiting period on coverage for individuals who could not prove that they'd had continuous health insurance for the previous 12 months.
- Health insurers could offer plans off the exchanges that do not comply with ACA standards if they also offer one gold-level and one silver-level plan on the exchanges.
- A fund would be established to reimburse health insurers for the cost of covering high-risk individuals.
- In determining the base period for per capita Medicaid funding, states that expanded their Medicaid programs after June 2015 could use a period of less than two years but no fewer than 12 months.
- Between 2020 and 2025, up to $5 billion in state Medicaid expenditures could be excluded from the funding cap if the secretary of HHS were to declare a public health emergency. States choosing the block grant option would also be eligible for additional funds during public health emergencies.
Congressional Budget Office reports
Revised bill
On July 20, 2017, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) released a report estimating the cost of the revised version of the Better Care Reconciliation Act (BCRA). Key findings included the following:[20]
- Federal budget: The revised BCRA would reduce the federal deficit by $420 billion between 2017 and 2026 due to a $903 billion decrease in direct spending and a $483 billion reduction in revenues.
- The bulk of the deficit reduction would come from lower spending on Medicaid due to the repeal of the Medicaid eligibility expansion.
- Health insurance: Compared to the ACA, 15 million more people would be uninsured in 2018 under the revised bill, and 22 million more people would be uninsured in 2026.
- Effects on premiums: Premiums would be 20 percent higher in 2018 and 10 percent higher in 2019 than under the ACA. Premiums in 2020 would be 30 percent lower than under current law, and in 2026, they would be 25 percent lower. Premiums would be lower for younger people and higher for older people.
- Effects on deductibles: The average deductible for a benchmark plan for an individual, which under the BCRA would cover 58 percent of costs, would be $13,000 in 2026. Under the ACA, the average deductible for an benchmark plan for an individual, which would cover 70 percent of costs, would be $5,000.
Original bill
On June 26, 2017, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) released a report estimating the cost of the Better Care Reconciliation Act (BCRA) as it was introduced and its impact on the number of uninsured. Key findings appear below.[21]
- Federal budget: The BCRA would reduce the federal deficit by $321 billion between 2017 and 2026 due to a $1 trillion decrease in direct spending and a $701 billion reduction in revenues.
- The bulk of the deficit reduction would come from lower spending on both Medicaid and health insurance tax credits.
- The largest revenue reductions would come from the elimination or modification of the ACA's tax provisions, such as the annual fees imposed on health insurers. Other revenue reductions would come from the elimination of penalties on individuals who do not purchase health insurance and on employers who do not offer it.
- Health insurance: Compared to the ACA, 15 million more people would be uninsured in 2018 under the BCRA, and 22 million more people would be uninsured in 2026. In total, under the BCRA, 49 million people would be uninsured in 2026, compared to 28 million who would be uninsured under the ACA.
- Stability of the health insurance market: The individual insurance market would be stable in most states. According to the report, tax credits would maintain sufficient demand for insurance and grants to states would help cover individuals with high healthcare costs. Additionally, appropriated funding for cost-sharing reductions would provide certainty to insurers. The report found that a few rural areas would experience instability as reduced tax credits lead fewer people to purchase insurance.
- Effects of premiums:
- The BCRA would increase premiums by about 20 percent in 2018 and 10 percent in 2019, compared to the ACA. This would be due to a lack of an individual mandate resulting in fewer healthy people purchasing coverage.
- In 2020, premiums would be about 30 percent lower than under current law due to plans covering a smaller share of health costs and federal funding for the purpose of premium reduction.
- In 2026, premiums would be about 20 percent lower than under the ACA. This would be a smaller reduction in premiums than in 2020 due to lower federal funding for reducing premiums. Some areas of the country could see substantially higher or lower premiums than the average due to states obtaining waivers from some of the law's provisions.
Outside groups and influencers on the BCRA
Support
- U.S. Chamber of Commerce - A coalition of U.S. Chamber of Commerce members sent the following letter to the Senate on June 26, 2017:
| “ | We the undersigned organizations recognize that the current health care system of this country under the Patient Protection and Affordable Care Act (ACA) is not working and is in need of serious and deep reforms. We appreciate the work you are doing to make health care more stable and affordable in the individual market and applaud the Better Care Reconciliation Act of 2017 for repealing many of the taxes and penalties imposed by the ACA.
As you know, U.S. employers provide stable, highly valued health benefits to more than 177 million Americans – the largest source of health care coverage in the country. As senators work to revise and amend this legislation to repeal and replace the ACA, we encourage you to protect the employer-sponsored system by fully repealing the ACA’s 40% 'Cadillac Tax' and refrain from imposing any new taxes on employee health care benefits. We commend and support the Senate for taking these steps while recognizing that changes will be needed as the legislative process continues. We urge your support for the process and look forward to continuing to work with policy makers as this legislation is further refined.[22] |
” |
| —U.S. Chamber of Commerce[23] | ||
Oppose
- AARP - Nancy LeaMond, executive vice president and chief advocacy and engagement officer for AARP, sent a letter to the Senate on June 27, 2017, stating the following:
| “ | Older Americans care deeply about access to and affordability of health care. They need and deserve affordable premiums, lower out of pocket costs, and coverage they can count on as they age. The Better Care Reconciliation Act (BCRA) does not achieve these goals. In fact, under the BCRA, premiums and out of pocket costs for 50-64 year olds buying their own insurance would skyrocket, Medicaid coverage for millions of seniors and people with disabilities would be at risk and the fiscal sustainability of Medicare would be weakened. In total, 22 million Americans would lose insurance coverage. Accordingly, AARP, on behalf of our 38 million members in all 50 states, Puerto Rico, the District of Columbia and US Virgin Islands, strongly opposes the Better Care Reconciliation Act of 2017.
We urge all Senators to vote NO on the Better Care Reconciliation Act and urge you to 'start from scratch' and craft health care legislation that ensures robust insurance market protections, lowers costs, improves quality, and provides affordable coverage to all Americans. AARP stands ready to assist in any way we can to craft such legislation. As our members expect from AARP, we will monitor each Senator's vote on the BCRA and notify them and other older Americans by reporting the vote in our publications, online, through the media, and in direct alerts to our members.[22] |
” |
| —Nancy LeaMond, executive vice president and chief advocacy and engagement officer for AARP[24] | ||
- American Hospital Association (AHA) - Rick Pollack, president and CEO of the AHA, released the following statement:
| “ | From the onset of this debate, America’s hospitals and health systems have been guided by a set of key principles that would protect coverage for Americans.
Unfortunately, the draft bill under discussion in the Senate moves in the opposite direction, particularly for our most vulnerable patients. The Senate proposal would likely trigger deep cuts to the Medicaid program that covers millions of Americans with chronic conditions such as cancer, along with the elderly and individuals with disabilities who need long-term services and support. Medicaid cuts of this magnitude are unsustainable and will increase costs to individuals with private insurance. We urge the Senate to go back to the drawing board and develop legislation that continues to provide coverage to all Americans who currently have it.[22] |
” |
| —Rick Pollack, president and CEO of the AHA[25] | ||
- Americans for Prosperity - Brent Gardner, chief government affairs officer for Americans for Prosperity, said he was disappointed in the bill because it did not "fully repeal Obamacare, including its costly regulations and mandates."[26]
News feed
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See also
Footnotes
- ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 Senate Committee on the Budget, "Better Care Reconciliation Act of 2017," accessed June 22, 2017
- ↑ The New York Times, "The Parliamentary Tactic That Could Obliterate Obamacare," January 4, 2017
- ↑ Politico, "GOP unveils Obamacare replacement amid sharp party divide," March 6, 2017
- ↑ CNN, "Senate parliamentarian: Anti-abortion provisions in GOP health care bill violate budget rules," July 21, 2017
- ↑ The Hill, "Parliamentarian deals setback to GOP repeal bill," July 21, 2017
- ↑ Axios, "More Senate health bill provisions violate budget rules," July 25, 2017
- ↑ Axios, "State health care waivers violate Senate budget rules," July 27, 2017
- ↑ CNN, "McConnell delays vote on health care bill until after July 4 recess," June 27, 2017
- ↑ Axios, "The new health care deadline: Get a deal by Friday," June 27, 2017
- ↑ CNN, "McConnell delays start of recess until third week in August," July 11, 2017
- ↑ The Washington Post, "McConnell defers vote on Senate health-care bill as McCain recovers from surgery," July 16, 2017
- ↑ Twitter, "FOX Business on July 13, 2017," accessed July 17, 2017
- ↑ CBS News, "Senate Republicans unveil modified health care bill to repeal and replace Obamacare," July 13, 2017
- ↑ Twitter, "Jerry Moran on July 17, 2017," accessed July 17, 2017
- ↑ Senator Mike Lee, "Sen. Mike Lee to Vote No on Senate Health Bill," July 17, 2017
- ↑ Senate.gov, "On the Motion (Motion to Waive All Applicable Budgetary Discipline Re: Amdt. No. 270)," July 25, 2017
- ↑ The Hill, "Senate GOP revives negotiation over ObamaCare repeal and replace," July 19, 2017
- ↑ Willis Towers Watson, "IRS announces 2017 limits for HSAs and HDHPs," May 11, 2016
- ↑ Senate Committee on the Budget, "Revised Better Care Reconciliation Act of 2017," July 13, 2017
- ↑ Congressional Budget Office, "H.R. 1628, the Better Care Reconciliation Act of 2017: An Amendment in the Nature of a Substitute," July 20, 2017
- ↑ Congressional Budget Office, "Congressional Budget Office Cost Estimate: Better Care Reconciliation Act of 2017," June 26, 2017
- ↑ 22.0 22.1 22.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ U.S. Chamber of Commerce, "Coalition Letter to U.S. Senate in Support of the 'Better Care Reconciliation Act of 2017,'" June 26, 2017
- ↑ AARP, "AARP Response to Congressional Budget Office Score of Senate Health Bill," June 27, 2017
- ↑ American Hospital Association, "Statement on the Better Care Reconciliation Act of 2017," accessed July 7, 2017
- ↑ Axios, "Conservative groups don't like Senate health bill, but haven't given up," June 23, 2017
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