What is the Status of New Healthcare Legislation
For months now, the daily news has been filled with stories about efforts to change the Affordable Care Act. In the past two elections cycles, hopeful politicians from all over the country argued the merits of “repealing and replacing” the momentous health care legislation that was signed into law in 2010. Thus far, instead of legislation moving through the process, the only consensus is that something has to be done to control sky-rocketing health care costs, decreasing numbers of insurers in the marketplace and high deductibles that are burdening middle-class families. So as our nation’s political leaders are less than a month away from their August recess, let’s take a look at where new health care legislation stands.
House of Representatives Bill – Called the American Health Care Act, or AHCA, the House health bill was passed in May 2017. The legislation was not accepted by the Senate, who instead decided to craft their own bill and then reconcile the two upon Senate passage. In the AHCA, there are a few main provisions to discuss.
- The AHCA eliminates the Affordable Care Act (ACA) mandates forcing individuals to purchase health care or face fines or penalties. Instead, AHCA encourages individuals to retain insurance coverage by prohibiting insurance companies from cutting coverage or charging more due to pre-existing conditions.
- AHCA eliminates income-based tax credits and replaces them with age-based credits of $2,000 for individuals in the 20’s to $4,000 for people 60 and over.
- AHCA eliminates most of the Affordable Care Act taxes, including the controversial tax on medical-device manufacturers.
- The provisions of the AHCA that involve Medicaid have been the most widely discussed. With AHCA, the expansion of the Medicaid program under the ACA would be gradually rolled back as individuals leave the Medicaid rolls. Medicaid would convert from an entitlement-based system to a block grant program where states are given a set amount of dollars up front.
- AHCA continues protections for pre-existing conditions and the allowance for young adults to remain on their parents’ plan up to age 26.
Senate Bill – Introduced on June 22, 2017, the Better Care Reconciliation Act (BCRA) of 2017, has not yet been brought forth for a vote. As the Senate returns from the July 4th holiday, they will have three weeks to make amendments to the bill and bring it forth for a vote. There has been talk that the Senate will forgo the August recess until this bill is resolved.
- The BCRA also eliminates the mandate to buy insurance. However, individuals who allow their coverage to lapse are forced to wait six months before getting new coverage. This is meant to incentivize healthy individuals to maintain coverage.
- The BCRA generates tax credits based on a combination of age, income, and geographical factors. As currently written, the income factor is lower than the ACA income factor requirement.
- Subsidies created under the ACA to assist in the payment of premiums and deductibles by the year 2020.
- BCRA continues protections for pre-existing conditions and the allowance for young adults to remain on their parents’ plan up to age 26.
- Currently, the ACA allows insurers to charge older customers up to three times more than the charge for young customers. The BCRA raises that allowance up to 5 times the cost.
- The BCRA allows individuals to double their contributions to pretax health savings accounts compared to the Affordable Care Act.
- The BCRA does not propose to cut Medicaid funding. Instead, it includes provisions to turn it into block grant-type funding and reduces the overall growth rate of Medicaid funding beginning in 2021.
Unfortunately, no one in the healthcare industry is any closer to understanding the fate of the legislative proposals. Earlier this year, our expectation was that there would be more definitive news one way or another, instead of continued uncertainty. Please stay tuned to the Patient Care Forum as we will post updates as they become available from Washington.
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