Whitfield L. Knapple, MD, FACG
Chair, ACG National Affairs

On Thursday, Senate Republicans released their latest iteration of the bill to repeal and replace the Patient Protection and Affordable Care Act (ACA).  Majority Leader Mitch McConnell (R-KY) canceled a previously planned vote before the July 4th recess on the “Better Care Reconciliation Act of 2017.”  The original bill was released in late June and is the Senate Republican’s response to the Republican House-passed bill, the “American Health Care Act of 2017.”  (Click here for the side-by-side comparison).

This week, Majority Leader McConnell released the “Better Care Reconciliation Act of 2017” 2.0.  Thus far, Senate Republicans have still been unable to come together and agree on a final version.  The next steps include a revised cost and coverage estimate from the Congressional Budget Office (CBO) early next week, followed by a procedural vote to bring the bill to the Senate floor.  It is unclear at this time whether Republican leadership has secured the 50 votes necessary to even bring the bill to the floor to begin the debate.

ACG remains discouraged over each iteration of the bill and will continue to use all opportunities to change the legislation to strengthen patient essential health benefits (EHBs), protection for those with pre-existing conditions, and patient cost-sharing.  As the College has previously stated, this process has become a test of political strategy and gamesmanship in order to get something/anything passed, as opposed to an opportunity for Congress to improve substantive issues with the ACA.  And there is plenty to improve: the misvalued code initiative (the ACA provision that led to Medicare cuts in upper and lower endoscopy fees), the cost-sharing quirk when screening colonoscopy turns therapeutic, the creation of the Independent Payment Advisory Board (IPAB), among other ACA provisions.  Congress is not dealing with these important items (the bad) while trying to change important patient-related coverage and cost-sharing provisions impacting ACG members’ patients (the good).  This has a real world, clinical GI impact, as many of these patients have, or will be labeled to have, a pre-existing condition, such as liver disease, IBD, IBS, GERD, or other diseases that ACG members treat every day.

The IPAB issue almost surfaced this week, as well.  The annual Medicare’s trustees report was released on Thursday, predicting that Medicare costs will grow from 3.6% of gross domestic product (GDP) to 5.6% by 2041.  Medicare’s hospital trust is now expected to be insolvent in 2029, a year later than originally estimated in 2016.  Why is this important?  When spending is projected to be higher than estimated, the ACA mandates an IPAB review to reduce costs, including provider reimbursement cuts.  Fortunately, the IPAB remains dormant and only a possibility.  The report says that IPAB may not have be activated until until 2021.  Yet ACG believes that the time to repeal IPAB is now, and continues to work with Congress in achieving repeal on your behalf.

What is in the revised Senate bill?  A review of what ACG flagged for you in early July:

In early July, ACG alerted members to some of the issues at play in any revised Senate plans to secure a 50 vote majority.

Let’s review:

“Opioid Crisis:  It has been reported that Senate Republicans and the White House have agreed to add at least $45 billion to the repeal bill to address the opioid crisis.  This could help win over moderates.”

Update: The revised Senate bill provides over $55 billion to help states address the opioid crisis.  This provision hopes to sway moderate Republicans, including Shelley Moore Capito (R-WV) and Rob Portman (R-OH).

“HSAs: One reported change is allowing consumers to use Health Savings Accounts to pay for more health costs, such as insurance premiums.  This could help win over conservatives.”

Update: The revised Senate plan adds that qualified medical expenses may include amounts paid for an account holder’s children who are under the age of 27. The section also states that HSA funds may be used to pay premiums for a high deductible health plan (HDHP) for which no deduction is allowed, that is not an employer-sponsored plan, and only for amounts that exceed any tax credit amounts allowed under IRC 36B. The amendments under this section would become effective in 2018 to increase the HSA annual contribution limits for self-only and family coverage to match the out-of-pocket limits for HSA-qualified HDHPs. The change would go into effect beginning in tax year 2018.

“Skirting ACA requirements:  Reports state that conservatives support a proposal from Sen. Ted Cruz (R-TX) to allow insurers to sell plans that don’t comply with ACA requirements.  This could help win over conservatives, but could cause moderates to oppose.”

Update: For now, the revised Senate plan tentatively includes the amendment from Sens. Cruz and Mike Lee (R-UT), but it could be altered or removed later on.

The Congressional Budget Office is reported to be analyzing two versions of the bill, one with the amendment and one without. That score is due next Monday.

According to reports, in a letter sent to Sens. Cruz and Lee, Blue Cross Blue Shield Association warned that the proposal is “unworkable, as it would undermine pre-existing condition protections, increase premiums and destabilize the market.” America’s Health Insurance Plans (AHIP) raised similar concerns: “Unfortunately, this proposal would fracture and segment insurance markets into separate risk pools and create an un-level playing field that would lead to widespread adverse selection and unstable health insurance markets.”

“Insurance Subsidies: The Senate bill scales back insurance subsidies and cuts off eligibility at 350% of the federal poverty line, compared with the ACA’s 400% threshold.  The CBO raised concerns that this change disproportionately benefits younger and healthier enrollees, causing older and poorer patients to pay significantly more for insurance.  It has been reported that the Senate could revert back to the ACA standards.  This would help to win over moderates but conversely cause conservatives to oppose.”

Update: The revised Senate version keeps this insurance subsidy level at 350% of the federal poverty level.  The “benchmark plan” used to determine the subsidies is changed from a 70% actuarial value to a plan with an actuarial value of 58%.  What does this mean? The actuarial value measures the costs which the insurers must assume.  A higher actuarial value plan indicates that the insurer will assume more costs and provide more benefits.  A lower actuarial valued comparative benchmark plan would mean lower subsidies for individuals, thus, less financial support to pay for insurance premiums.

“Not repealing certain ACA taxes: Reports state that the new draft will NOT include a provision to repeal the 3.8% surtax on investments that was contained in the original version.  The CBO says that this provision would cost $172 billion across 10 years in lost federal revenue.”

Update: The revised Senate bill keeps this ACA tax.  The bill would also repeal several taxes put in place under the ACA, including ones on prescription drugs, medical devices and tanning salons. It would also repeal limits on flexible spending account contributions.  The 3.8% net investment income tax hits individual taxpayers whose annual income exceeds $200,000, and joint filers who earn more than $250,000 per year.

“Planned Parenthood: One change is stripping out a provision that defunds Planned Parenthood for one year.  This option could come in a separate vote to win over both moderates and conservatives.”

Update: This revised Senate plan keeps the 1 year prohibition of federal funds to Planned Parenthood.  The bill also prohibits HSA funds to be used to pay for a high deductible plan that provides coverage for abortions (except if necessary to save the life of the mother or if the pregnancy is the result of rape or incest), beginning in 2018.

The revised Senate bill also:

  • Establishes a “State Stability and Innovation Program” that provides $15 billion for each of CY2018 and CY2019, and $10 billion for each of CY2020 and CY202. The CMS Administrator would be required to use the monies to fund arrangements with health insurers to “assist in the purchase of health benefits coverage by addressing coverage and access disruption and responding to urgent health care needs within states.”
  • Establishes a Long-Term State Stability and Innovation Program. The new program would authorize over $100 billion funding available in 2019 – 2026 for states to help high-risk individuals purchase health benefits coverage, help those projected to have high health care costs and who do not have access to employer-sponsored insurance, stabilize premiums in the individual market, provide payments for health care providers, and to provide health insurance coverage by funding assistance to reduce out-of-pocket costs (such as copayments, coinsurance, and deductibles) for individuals with individual health insurance coverage. The bill requires states to go through a regulatory application process to receive these funds.  States would be expected to provide a certain amount of state-funds to continue these programs beginning in 2022.
  • Allows states and state Medicaid plans to waive essential health benefits.
  • Ends Medicaid expansion in 2019. For states that implemented the ACA Medicaid expansion as of March 1, 2017, the bill would maintain the current structure of the newly eligible matching rate for expenditures through 2020. The newly eligible matching rate would phase down to 85% in CY2021, 80% in CY2022, and 75% in CY2023.
  • Permits states, effective October 1, 2017, to require nondisabled, non-elderly, non-pregnant individuals to satisfy a work requirement as a condition for receipt of Medicaid medical assistance.

Majority Leader McConnell also announced this week that the Senate will delay the August recess to work on health care and other legislative priorities.  ACG will continue to try and take advantage of the fluid satiation on Capitol Hill in order to improve any bill that impacts GI clinicians and patients.

Whitfield L. Knapple, MD, FACG

Chair, ACG National Affairs Committee