Senate Republicans Unveil their ‘Better Care Reconciliation Act’

Yesterday, Senate Republicans released their discussion draft of the legislation to repeal and replace the Affordable Care Act, deemed the Better Care Reconciliation Act (BCRA). Only a handful of Republican Senators involved in the bill writing – that took place over the past several weeks – were privy to the details of the bill prior to the public release. The Senate now awaits a score by the Congressional Budget Office which is anticipated to be released early next week. Senate Majority Leader Mitch McConnell is anticipated to hold a vote on the bill by June 30 prior to members departing for their July 4 recess.

Key provisions of the BCRA are highlighted below, along with brief notations where provisions differ or align with the American Health Care Act (AHCA), which was passed by the House in May.

Public Health and Prevention Fund. Repeals funding for the Public Health and Prevention Fund, resulting in the loss of $900 million in FY 2018 and FY 2019, $1 billion in FY 2020 and FY 2021, $1.5 billion in FY 2022, $1 billion in FY 2023, $1.7 billion in 2024 and $2 billion in FY 2025 and thereafter, consistent with the AHCA.

Medicaid Expansion. Rolls back the Medicaid expansion and enhanced FFP as follows:

  • FY 2020 – 90%
  • FY 2021 – 85%
  • FY 2022 – 80%
  • FY 2023 – 75 %

In FY 2024 and beyond, the enhanced match is completely eliminated.

Please note this roll back of the enhanced match occurs on a quicker timeline than proposed under the AHCA.

Medicaid Per Capita Caps. Beginning in FY 2020, Medicaid would be converted to a per capita cap model. States would choose eight consecutive quarters (2 years) as the base to set targeted spending for each enrollee. This amount would be increased by an annual inflation factor. States that spend more than their per capita cap, would receive less funding in the following fiscal year.

Medicaid Block Grant. Allows states beginning in FY 2020 to participate in the Medicaid Flexibility Program, which would provide states with block grant funding for a five-year period to fund “targeted health assistance” for specific populations that would otherwise be included in the per capita cap.

Essential Health Benefits. Would eliminate the Essential Health Benefit provisions after December 31, 2019, thus no longer requiring states to ensure preventative and wellness services, maternity and newborn care, and mental health and substance use disorder services are included as minimum benefits, among others.

The original version of the AHCA also eliminated the Essential Health Benefit provisions. However, they were later reincorporated into the bill language and allowed states the ability to obtain a waiver from this requirement.

Medicaid Eligibility. Allows for redeterminations for Medicaid eligibility every 6 months and provides an enhanced FMAP for administrative activities for states that do so. Also makes eligibility retroactive only to prior month versus the prior 90 days and eliminates presumptive eligibility effective January 2020. Each provision is consistent with the AHCA.

State Stability and Innovation Program. Provides $62 billion to states for 8 years to be used to provide financial assistance to high-risk individuals, enter into arrangements to stabilize premiums, provide payments to health care providers, and provide assistance to reduce out-of-pocket costs. In FY 2019-2020, at least $5 billion per year is restricted and must be used in arrangements with health insurers. States would have a state-share of costs beginning in FY 2022 and increasing annually.

Subsidies. Uses a lower-level plan as the benchmark for subsidies, beginning in FY 2020, which would likely increase deductibles and offer less comprehensive benefits. Would also change the income qualifications from 100%-400% FPL to up to 350% FPL.

Market Stabilization. Provides $50 billion from CY 2018 through CY 2021 to CMS for health plans to address disruptions in coverage and access and respond to urgent health care needs, similar to the AHCA’s Patient and State Stability Fund.

Safety Net Funding for non-expansion States. Provides $10 billion to non-expansion states over 5 years ($2 billion per year) consistent with the AHCA.

Work Requirements. Permits states require Medicaid beneficiaries to fulfill a work requirement to receive Medicaid benefits, effective October 1, 2017. Disabled, elderly and pregnant beneficiaries would be exempt. Pregnant individuals have 60-days post-partum until work requirements apply. States who implement this would receive an enhanced match of 5% for administrative activities.

Prohibited Entities. Prohibits federal funds to be made available for prohibited entities that provide abortion services, mainly targeted at defunding Planned Parenthood.

Opioid Funding. Authorizes $2 billion for FY 2018 to support substance use disorder treatment and recovery support services for individuals with mental health or substance use disorders.

Individual Mandate. Repeals the penalties, effectively eliminating the individual mandate retrospectively to CY 2016.

Employer Mandate. Repeals penalties beginning back in CY 2016, effectively eliminating the employer mandate.

Taxes. Repeals, delays and/or reduces a number of taxes.