I've been in the emergency room waiting on stitches today. Yes, I know. Ironic. But it left me with a few hours to read the bill, talk with knowledgeable friends and break down the Bill for everyday consumption.
THE GIST:
The Senate bill is indeed "less mean" than the House bill, but it is still going to result in a significant drop in the number of people with health insurance coverage and will result in HUGE cuts to state Medicaid funding. "High-quality" and "affordable" are defined in statute btw.
After reading the Senate bill, here's my breakdown of what's in the "Better Care Reconciliation Act":
ACA Repeal
- Repeals the ACA’s mandates and all of its taxes except for the "Cadillac tax", which would be delayed.
- Does not replace individual mandate with a penalty or surcharge (the House bill included a late enrollment penalty of 30% for those who fail to maintain continuous coverage).
Subsidies / Tax Credits
- ACA cost-sharing subsidies extended through 2019 and then repealed.
- ACA premium tax credits only available for people with incomes up to 350% FPL (currently 400%) beginning in 2020.
- Allows people below 100% FPL to qualify for tax credits in non-Medicaid expansion states.
- Tax credits will be based on both income and age.
- Changes the amount considered “affordable” for purposes of receiving tax credits from 9.7% of an individual’s income to as much as 16.2%, depending on the person’s age and income.
- Health plans that offer abortion services would not be eligible for premium subsidies.
Medicaid
- Expansion: phased out starting in 2021 and eliminated in 2024 (enhanced match would be 90% in 2021 and phased down to 75% in 2023). Expansion states would continue to receive an enhanced match for already enrolled expansion recipients that continue to meet eligibility requirements.
- Financing: Converts cost-based financing to state per capita caps (state option to chose block grants). States can choose their base years for per-capita caps based on eight consecutive quarters from first quarter of 2014 through second quarter of 2017.
- Growth: Annual growth in caps would be initially tied to medical inflation (CPI-M) and then switched to general inflation (CPI-U) starting in 2025.
- State Flexibility: States may impose work requirements for people on Medicaid, except for the elderly, pregnant women and people with disabilities.
- DSH: Reductions eliminated effective 2020 for expansion states; non-expansion states receive an increase based on level of uninsured.
- IMD exclusion: Repealed for opioid treatment for 30 days, but not to exceed 90 days within a calendar year.
Fund Creation
- Long-Term State Innovation Fund: $62 billion over 8 years for states to assist high-cost and low-income individuals.
- Short-Term Stabilization Fund: $50 billion (2018-2021) for insurers to “address coverage and access disruption.” Substance Abuse & Mental Health Programs: $2 billion in FY 2018.
State Innovation Waivers
- States are encouraged to use ACA Section 1332 waivers to redesign their insurance markets, including opting out of certain ACA coverage requirements, as long as those states meet certain coverage, access, and cost requirements.
- States may apply to waive some of the ACA's insurance regulations, but the legislation does not explicitly state that regulations governing essential health benefits, pre-existing conditions etc are waivable.
- A $2 billion incentive fund (2017-2019) is created to encourage states to use the waivers.
- Waivers can be approved through an expedited process and stay in place for 8 years and renewed for an unlimited number of 8 year periods.
And to Wrap...
After digging into existing law a bit more, it's clear now that the Senate bill does, in fact, remove the "MacArthur Amendment" that would have allowed states to waive the pre-existing condition requirement of the ACA. The 1332 waivers only cover specific portions of the ACA (Essential Health Benefits, Health Insurance Marketplace regulations, and a few others), and do not apply to health rating requirements.