ACA Repeal Watch: Senate Releases Anticipated Health Reform Draft

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

On Thursday, June 22, 2017, the Republican Leadership in the U.S. Senate released the much anticipated health reform draft: the Better Care Reconciliation Act of 2017. This is the Senate’s version of the bill to repeal and replace the Patient Protection and Affordable Care Act (ACA). Republican leaders hope to have a vote prior to the July 4th congressional recess. The Senate can pass this legislation by a simple majority as the bill is being shepherded through the Senate via the budget reconciliation process (the same process the Senate used to pass the ACA in 2010). However, Majority Leader Mitch McConnell (R-KY) must first deal with fractions within the Republican Party in order to secure a majority vote.

What is ACG doing? The College remains discouraged over potential changes to patient cost-sharing, essential health benefits, and coverage for those with pre-existing conditions. Whenever legislators are forced to vote on “taking away” a benefit, it is always an uphill battle politically. It appears that important substantive policy issues are getting eclipsed by the importance of getting something/anything passed. However, this may afford more opportunity to improve the bill. ACG continues to advocate on behalf of GI patients and GI practices (small businesses) with like-minded organizations to improve this draft prior to any vote occurring next week or over the summer.

ACG has compiled a brief side-by-side overview of some of the major issues in each bill:

Senate Bill	House Bill
Senate Republican leadership hopes to have a vote prior to the July 4th congressional recess. Who to watch? Sen. McConnell can only afford to lose 2 Republicans: Rob Portman (OH), Susan Collins (ME), Shelley Moore Capito (WV), Lisa Murkowski (AK), Ted Cruz (TX), Ron Johnson (WI), Mike Lee (UT), Rand Paul (KY), Dean Heller (NV), and Vice President Mike Pence, who could be forced into placing a tie breaking vote.	On May 4th, 2017, the U.S. House of Representatives passed the American Health Care Act (AHCA) after months of negotiating with President Trump and fractions within the House Republican caucus. The AHCA is designed to repeal and replace the Patient Protection and Affordable Care Act (“ACA”), which passed in 2010. The House passed the bill on a 217-213 vote, with 20 Republicans and all Democrats voting “no.” Click here for the list of 20 Republicans who bucked party leadership and President Trump to vote “no.” ACG provided membership with a summary this bill.

Senate Bill

House Bill

Senate Republican leadership hopes to have a vote prior to the July 4th congressional recess.

Who to watch? Sen. McConnell can only afford to lose 2 Republicans: Rob Portman (OH), Susan Collins (ME), Shelley Moore Capito (WV), Lisa Murkowski (AK), Ted Cruz (TX), Ron Johnson (WI), Mike Lee (UT), Rand Paul (KY), Dean Heller (NV), and Vice President Mike Pence, who could be forced into placing a tie breaking vote.

On May 4th, 2017, the U.S. House of Representatives passed the American Health Care Act (AHCA) after months of negotiating with President Trump and fractions within the House Republican caucus. The AHCA is designed to repeal and replace the Patient Protection and Affordable Care Act (“ACA”), which passed in 2010. The House passed the bill on a 217-213 vote, with 20 Republicans and all Democrats voting “no.” Click here for the list of 20 Republicans who bucked party leadership and President Trump to vote “no.” ACG provided membership with a summary this bill.

Congressional Budget Office: Cost and Coverage Estimates

Senate Bill	House Bill
The CBO says it will have a cost estimate of the Senate bill early next week.	The House passed the bill before the CBO score. On May 24, 2017 CBO estimated that, in 2018, 14 million more people would be uninsured, compared with the current law. By 2026, that figure would rise to 23 million. CBO projects the legislation would reduce federal deficits by $119 billion over 10 years. That amount is $32 billion less than the savings for the previous version of AHCA that CBO scored on March 23rd. Some other brief points on the CBO score can be found here.

Senate Bill

House Bill

The CBO says it will have a cost estimate of the Senate bill early next week.

The House passed the bill before the CBO score. On May 24, 2017 CBO estimated that, in 2018, 14 million more people would be uninsured, compared with the current law. By 2026, that figure would rise to 23 million. CBO projects the legislation would reduce federal deficits by $119 billion over 10 years. That amount is $32 billion less than the savings for the previous version of AHCA that CBO scored on March 23rd. Some other brief points on the CBO score can be found here.

Cost-Sharing and Premium Assistance

Senate Bill	House Bill
Insurers would be allowed to charge older customers 5x more than younger ones for the same health plan. (Under the ACA, that ratio is 3-to-1.) Uses existing ACA system of federal tax credits. However, the Senate bill’s credits are based on age, income, and geographic location. Eligibility for the subsidies is scaled back to include households with incomes under 350% of the federal poverty level (FPL), and like the ACA, the subsidies are tied to a “benchmark plan.” However, the Senate bill’s benchmark provides much less coverage — under the ACA, the benchmark plan was based on an actuarial value (how much costs the insurer must assume) of 70%. The Senate benchmark plan would have an average actuarial value of 58%.	Insurers would be allowed to charge older customers 5x more than younger ones for the same health plan. (Under the ACA, that ratio is 3-to-1.) Replaces the ACA premium tax credits with a new refundable, advanceable tax credit for the purchase of health insurance. The tax credit is determined on a monthly basis for eligible individuals. The monthly limitation amount for any individual for any eligible coverage month is $167 for an individual under 30 at the beginning of the tax year, $208 ages 30-39, $250 ages 40-49, $292 ages 50-59, and $333 ages 60 and above. The credit is reduced by 10 percent of the excess of the taxpayer’s modified adjusted gross income over $75,000 ($150,000 for a joint return).

Senate Bill

House Bill

Insurers would be allowed to charge older customers 5x more than younger ones for the same health plan. (Under the ACA, that ratio is 3-to-1.)

Uses existing ACA system of federal tax credits. However, the Senate bill’s credits are based on age, income, and geographic location. Eligibility for the subsidies is scaled back to include households with incomes under 350% of the federal poverty level (FPL), and like the ACA, the subsidies are tied to a “benchmark plan.” However, the Senate bill’s benchmark provides much less coverage — under the ACA, the benchmark plan was based on an actuarial value (how much costs the insurer must assume) of 70%. The Senate benchmark plan would have an average actuarial value of 58%.

Insurers would be allowed to charge older customers 5x more than younger ones for the same health plan. (Under the ACA, that ratio is 3-to-1.)

Replaces the ACA premium tax credits with a new refundable, advanceable tax credit for the purchase of health insurance. The tax credit is determined on a monthly basis for eligible individuals. The monthly limitation amount for any individual for any eligible coverage month is $167 for an individual under 30 at the beginning of the tax year, $208 ages 30-39, $250 ages 40-49, $292 ages 50-59, and $333 ages 60 and above. The credit is reduced by 10 percent of the excess of the taxpayer’s modified adjusted gross income over $75,000 ($150,000 for a joint return).

Pre-existing Conditions and Essential Health Benefits

Senate Bill	House Bill
These ACA requirements remain. But states could waive other insurance rules that could weaken protections for medical conditions, including pre-existing conditions. Allows state flexibility via state waivers to eliminate requirements such as the establishment of basic benefits packages, essential health benefits, and minimum payments insurers must make toward medical bills, which could weaken preexisting condition protection.	The House bill would have let states opt out of the requirement that insurers must charge everyone the same, regardless of pre-existing conditions. Allows states to request a waiver to allow for “health status” underwriting for individuals who did not maintain continuous coverage.

Senate Bill

House Bill

These ACA requirements remain. But states could waive other insurance rules that could weaken protections for medical conditions, including pre-existing conditions.

Allows state flexibility via state waivers to eliminate requirements such as the establishment of basic benefits packages, essential health benefits, and minimum payments insurers must make toward medical bills, which could weaken preexisting condition protection.

The House bill would have let states opt out of the requirement that insurers must charge everyone the same, regardless of pre-existing conditions.

Allows states to request a waiver to allow for “health status” underwriting for individuals who did not maintain continuous coverage.

Medicaid: (31 states and Washington, D.C. have expanded their Medicaid programs via the ACA.)

Senate Bill	House Bill
Both the Senate and House bills try to convert Medicaid to a “per capita” system starting in 2020 with optional block grants for certain populations, as well as the optional beneficiary “work requirements.” The Senate cuts Medicaid more deeply than the House bill. Starting in 2025, the Senate version uses a slower annual growth rate for payments made to states. Both the Senate and House bills allow states to waive essential health benefits beginning 2020. The Senate bill would not freeze Medicaid expansion, allowing states to enroll and cover individuals up to 133 percent FPL through December 31, 2017. States that had not expanded their programs as of March 1, 2017 could opt to do so, but would receive their regular matching rate to cover new enrollees. The Senate bill maintains the enhanced federal reimbursement (“FMAP”) for the Medicaid expansion population until December 31, 2020, after which enhanced funding would be phased down from 85% to 75% over three years (2021-2023). No enhanced funding would be available to states after December 31, 2023.	Both Senate and House bills try to convert Medicaid to a “per capita” system starting in 2020 with optional block grants for certain populations, as well as the optional beneficiary “work requirements.” The Senate cuts Medicaid more deeply than the House bill. Starting in 2025, the Senate version uses a slower annual growth rate for payments made to states. Both the Senate and House bills allow states to waive essential health benefits beginning 2020. The House bill would freeze Medicaid expansion after March 1, 2017, by eliminating the state option to expand and receive enhanced federal payments. Under the House bill, states that have already expanded could keep the enhanced match for expansion enrollees until December 31, 2019, but after that would receive an enhanced federal reimbursement (“FMAP”) only for individuals enrolled as of December 31, 2019, who do not become disenrolled for more than a month (otherwise known as “grandfathered expansion enrollees”). The rollback would begin in 2020 for people who come off the Medicaid rolls, and new enrollees wouldn’t receive enhanced funding.

Senate Bill

House Bill

Both the Senate and House bills try to convert Medicaid to a “per capita” system starting in 2020 with optional block grants for certain populations, as well as the optional beneficiary “work requirements.” The Senate cuts Medicaid more deeply than the House bill. Starting in 2025, the Senate version uses a slower annual growth rate for payments made to states.

Both the Senate and House bills allow states to waive essential health benefits beginning 2020.

The Senate bill would not freeze Medicaid expansion, allowing states to enroll and cover individuals up to 133 percent FPL through December 31, 2017. States that had not expanded their programs as of March 1, 2017 could opt to do so, but would receive their regular matching rate to cover new enrollees.

The Senate bill maintains the enhanced federal reimbursement (“FMAP”) for the Medicaid expansion population until December 31, 2020, after which enhanced funding would be phased down from 85% to 75% over three years (2021-2023). No enhanced funding would be available to states after December 31, 2023.

Both Senate and House bills try to convert Medicaid to a “per capita” system starting in 2020 with optional block grants for certain populations, as well as the optional beneficiary “work requirements.” The Senate cuts Medicaid more deeply than the House bill. Starting in 2025, the Senate version uses a slower annual growth rate for payments made to states.

Both the Senate and House bills allow states to waive essential health benefits beginning 2020.

The House bill would freeze Medicaid expansion after March 1, 2017, by eliminating the state option to expand and receive enhanced federal payments.

Under the House bill, states that have already expanded could keep the enhanced match for expansion enrollees until December 31, 2019, but after that would receive an enhanced federal reimbursement (“FMAP”) only for individuals enrolled as of December 31, 2019, who do not become disenrolled for more than a month (otherwise known as “grandfathered expansion enrollees”).

The rollback would begin in 2020 for people who come off the Medicaid rolls, and new enrollees wouldn’t receive enhanced funding.

Insurance “Stabilization” Fund: To Help Troubled Insurance Markets

Senate Bill	House Bill
The Senate bill provides $112 billion to help states stabilize shaky insurance markets. The money is funneled through a short-term reinsurance program to offset expensive claims from high-cost patients, and a longer-term program that runs through 2026. The Senate bill provides $50 billion in federal funding for reinsurance to insurers from 2018 through 2021. A separate program sets aside grant funding for states between 2019 and 2026, with yearly amounts ranging from $4 billion to $14 billion. The money can be used to help lower premiums and other out-of-pocket costs for insurance, or set up programs that would encourage insurers to sell in the individual market.	The House bill provides $115 billion to states over a nine-year period to stabilize their markets through high-risk pools for sick patients, reinsurance programs or other mechanisms. Another $8 billion was included for states that waived the ACA’s provision which bans insurers from charging sick patients more (this waiver is not in the Senate bill).

Senate Bill

House Bill

The Senate bill provides $112 billion to help states stabilize shaky insurance markets.

The money is funneled through a short-term reinsurance program to offset expensive claims from high-cost patients, and a longer-term program that runs through 2026.

The Senate bill provides $50 billion in federal funding for reinsurance to insurers from 2018 through 2021. A separate program sets aside grant funding for states between 2019 and 2026, with yearly amounts ranging from $4 billion to $14 billion. The money can be used to help lower premiums and other out-of-pocket costs for insurance, or set up programs that would encourage insurers to sell in the individual market.

The House bill provides $115 billion to states over a nine-year period to stabilize their markets through high-risk pools for sick patients, reinsurance programs or other mechanisms. Another $8 billion was included for states that waived the ACA’s provision which bans insurers from charging sick patients more (this waiver is not in the Senate bill).

Whitfield L. Knapple, MD, FACG

Chair, ACG National Affairs Committee