Senate Republicans Release Revised ‘Better Care Reconciliation Act’

Upon returning from their Independence Day Recess this week, Senate Republicans unveiled their revised version of the ‘Better Care Reconciliation Act’ to repeal-and-replace the Affordable Care Act. Senate Republicans experienced intense turmoil from within their party and stiff opposition from the general public after releasing their initial discussion draft of the BCRA on June 22. The most recent version of the bill slightly reworks several provisions related to coverage requirements and payment options, tax breaks, and opioid epidemic funding.

What has changed from the initial BCRA draft?

 “The Cruz Amendment” – An amendment ushered by Senator Ted Cruz would permit insurers to offer lower cost, slimmed-down coverage as long as insurers offer at least one plan that meets current ACA standards. Under current law, insurers are required to meet minimum essential benefit coverage requirements.

Funding for Out-of-Pocket Costs – The first BCRA draft included $112 billion for states to reduce premiums and out-of-pocket costs. The revised version of the BCRA increases federal funding by $70 billion bringing the total to $182 billion.

Health Savings Accounts for Premiums – The updated BCRA version would permit individuals to use health savings accounts to pay for their health insurance premiums in excess of any tax benefit they already receive to purchase health care.

Catastrophic Coverage – The revised BCRA would allow anyone to purchase a catastrophic health plan and permit people otherwise eligible for federal subsidies to receive tax credits to purchase catastrophic health plans. Under the ACA, only young adults and certain other people are eligible to purchase catastrophic plans with low premiums, and federal subsidies are not available for these plans.

Opioid Funding – In an attempt to address the growing national opioid epidemic, the revised bill provides $45 billion to states for substance abuse treatment and recovery services. The previous version of the BCRA allocated $2 billion for one year.

Funding for Certain States – In a further attempt to sweeten the deal for some Republican Senators, the revised BCRA includes additional federal funding for certain states. Alaska, for example, would receive $1.3 billion in funding to keep its insurance markets stable.

Tax Breaks – The previous version of the BCRA included a series of tax breaks benefiting the wealthy and high-earning health insurance executives. In the revised version, BCRA would keep some of the ACA taxes used to fund the law’s coverage expansion and eliminate two tax cuts benefiting the wealthy. Most taxes under ACA, however, would be repealed.

What remains the same in the revised BCRA?

Medicaid Overhaul – The revised BCRA still includes deep cuts to Medicaid to the tune of nearly $800 billion, most notably through phasing out state Medicaid expansion under the ACA from 2020 through 2024. The slowed growth rate of federal spending for Medicaid still remains in the reworked BCRA.

Individual Mandate – ACA penalties for going without health insurance would be eliminated and individuals who have not been continuously covered would be locked out of the health insurance marketplace for six months.

Tax Credit Reductions – Senate Republicans retained provisions making coverage tax credits available to individuals earning up to 350 percent of the federal poverty level. The ACA currently provides tax credits to individuals earning up to 400 percent of the federal poverty level.

Coverage for Older Adults – Maintained in the revised BCRA are provisions permitting insurers to charge older enrollees up to five times as much as their younger enrollees. Under current law, insurers can only charge up to three times as much for older enrollees.

Cost-Sharing Subsidies – Payments to insurers to cover most low-income individuals in ACA marketplaces would be extended for two years before being eliminated, a provision that remains unchanged in the revised BCRA.

Planned Parenthood Funding – The revised BCRA still eliminates federal funding for Planned Parenthood for one year and prohibits individuals from using Medicaid services at Planned Parenthood clinics.

What is next?

Despite reworking provisions of the BCRA, Senate Republican Leader Mitch McConnell faces a difficult road ahead. A score from the Congressional Budget Office (CBO) is expected on Monday, but the score is not expected to include the Cruz Amendment. A handful of moderate Senate Republicans remain leery of the revised version of the bill, citing the drastic overhaul of Medicaid, not enough funding to address the opioid crisis, and the restriction of funding of Planned Parenthood services. To attempt to secure the support of these moderate Senate Republicans, additional sweeteners have been included in the revised measure, including $1.3 billion in federal funding to Alaska. Vice President Mike Pence has also been enlisted by Majority Leader McConnell to assist by meeting personally with both moderate senators and state governors.

Majority Leader McConnell is eyeing to begin debate on the revised BCRA next week and hold a vote shortly thereafter. However, Republicans appear to be simply focused on pulling together enough votes for a procedural motion to begin debate. With two Republicans on record already opposing the procedural motion, McConnell cannot afford for another senator to vote against the procedural motion; doing so would kill the Republican’s attempt to repeal the ACA altogether. Some Republican Senators have suggested their path forward may require them to scrap the BCRA and work with Senate Democrats to craft a new health care measure.