June 2017

Late last week, the Senate Republican leadership publicly released its Affordable Care Act (ACA) repeal and replace bill, called the Better Care Reconciliation Act. The bill follows the House legislation with some exceptions, such as deeper cuts over time to the Medicaid program. The bill also allows insurers to charge older Americans up to five times higher premiums, as the House bill does, which would significantly increase the cost of health care for older Americans. Although we are analyzing the full impact of the bill, we can report the main proposals and impacts below.

The Senate ACA repeal and replace bill does the following:

• Repeals the individual and employer health insurance mandates (same as House bill)
• Young adults can remain on parents health insurance plans (same as House bill)
• Maintains both the ban on pre-existing condition insurance exclusions and ACA's community rating rules which prevent insurers from charging people with pre-existing conditions higher premiums
• Gives states flexibility to change essential health benefits packages (same as House bill)
• Creates tax credits for consumers to buy insurance based on age, income (up to 350 percent of poverty level as opposed to 400 percent under ACA) and geography. Credits could also be applied to lower-cost insurance plans
• Insurers can charge older customers up to 5 times more than younger customers (same as House bill)
• End cost-sharing subsidies for insurers in 2020 (same as House bill)
• Provides $112 billion for state high-risk pools ($130 billion in House bill) over 10 years.

Medicaid Changes

• Changes Medicaid structure to a per capita cap or block grant (same as House bill) in 2021 but funds state Medicaid programs according to a slower growth rate so reductions to state Medicaid programs would be larger over time than in House bill
• Deadline for states to expand Medicaid is 2020 (House bill deadline is 2017)
• In 2021, government pays smaller portion of Medicaid expansion cost (House bill starts this in 2019) and ends the Medicaid expansion in 2024.
• Permits states to impose work requirements on non-disabled, non-elderly and non-pregnant individuals (same as House bill).

The Congressional Budget Office (CBO) scoring of how the Senate bill will impact health insurance coverage and costs is expected out on Monday. The CBO score will be a very important measure of the bill as it will specifically estimate how many Americans may lose health insurance coverage. Senate Republican leaders are aiming to bring the bill to full Senate floor votes by the end of next week although 4 Republican senators, Sens. Paul (R-KY), Cruz (R-TX), Lee (R-UT) and Johnson (R-WI) have stated they will not vote for the bill in its current form. Under Senate rules, the bill requires a simple 51-vote majority for passage.