U.S. Senate Proposes Health Care Changes

Another Step BackwardsYesterday, the U.S. Senate released the “Better Care Reconciliation Act (BCRA) of 2017,” containing their proposed changes to our health care system and the Patient Protection and Affordable Care Act (ACA). The language we have now is still being referred to as a ‘discussion draft,’ which means that it has not been officially introduced in the Senate. This bill would replace the text of the American Health Care Act (H.R. 1628), that was passed by the U.S. House of Representatives last month.  Additionally, this proposal has not been scored by the Congressional Budget Office (CBO), which is expected to release a score on Monday or Tuesday of next week.  That score will provide an estimated analysis of how much the bill will cost and how many people will lose coverage.

Senate Leadership are planning to hold a vote on this bill by the end of next week, leaving only a few days for the members of the Senate to review these proposed health care changes.  At this time, there is no plan to hold any committee hearings about this bill.

What’s Included

The bill is 142 pages long, so we are still working to digest its full ramifications, but we did want to highlight some things we know will have an impact on the cancer community.

              Consumer Protections

Certain consumer protections in the ACA remain unchanged by the BCRA, such as prohibiting health insurers from denying coverage or charging someone more for coverage based on a pre-existing condition, the ability for children under the age 26 to stay on their parent’s plan, and 90-day maximums for waiting periods for employer-sponsored plans.

However, other protections for people who have pre-existing conditions would be weakened. The BCRA sets up a system where states are incentivized with $2 billion to apply for a waiver. These waivers would give states the ability to redefine essential health benefits (EHB) and to change or reduce other coverage standards. This means that plans may no longer be required to cover services like prescription drugs, hospitalization, or mental health care.  Additionally, while current law prohibits insurance companies from placing annual or lifetime dollar limits on EHBs, they are allow to impose these limits on anything else.  So if, for example, a state chooses to not include prescription drugs as an EHB, plans could impose lifetime and annual limits on prescription drugs.

              Financial Assistance

Currently, there are two types of financial assistance options available to help people access plans sold through the ACA’s health insurance marketplaces: 1) premium tax credits, which lower monthly premiums based on income; 2) cost-sharing subsidies, sometimes referred to as cost-sharing reductions, which lower deductibles, co-payments, and co-insurance payments.

The way that cost-sharing subsides work is that the insurance company reduces what they charge individuals and in turn they are reimbursed by the federal government.  The BCRA would only keep the federal governments’ reimbursements back to the insurance companies for 2018 and 2019.  Eliminating these reimbursements for 2020 makes it more likely that insurance companies will pull out of state marketplaces, reducing choice for consumers and likely increasing costs for everyone.

The BCRA would also change the eligibility requirements for premium tax credits.  Currently, these credits are available to anyone purchasing a plan in the marketplaces who have a household income level between 138% and 400% of the federal poverty level (FPL).  In dollar amounts that is equal to an individual whose income is between $16,642 and $47,520. The BCRA is proposing cutting the tax credits so that they are only available to people with incomes up to 350% of the FPL ($42,210) starting in 2020.

In addition to having a low enough household income level, an individual must spend 9.5% of their income on health insurance premiums in order to get a tax credit. The BCRA is proposing that this amount be tiered based on age. For example, a 60-year-old with an income between 300 and 350% of the FPL would have to spend 16.2% of their household income on premiums before becoming eligible for a tax credit, while a 28-year-old would only have to pay 4.3%.

Current law also restricts insurance companies to only being able to charge older Americans up to three times more for their private health insurance. For example, a 64-year-old can only be charged a maximum of three times more than a 21-year-old in the same location. The BCRA is proposing to increase that age ratio to allow insurance companies to charge up to five times more for older Americans.

These changes would make it harder for everyone to purchase insurance in the marketplace, and would certainly impose a greater burden on older Americans.

              Individual and Employer Mandates

The BCRA would effectively eliminate the requirement for Americans to have health insurance by making the penalty $0.  It would also effectively eliminate the requirement for mid-sized and large employers to pay a penalty if they don’t provide health insurance to their employees, by making the penalty $0. The concern with these eliminations is that the money collected through the penalties help pay for some of the financial assistance people receive to purchase plans in the marketplaces.

              Medicaid

Under the ACA, states were given the opportunity to expand their Medicaid programs by adding a new category of eligibility for anyone with a household income under 138% of the FPL.  As part of this expansion the federal government would reimburse states for the costs of adding these newly eligible individuals to their Medicaid programs.  The BCRA would begin to reduce federal reimbursements at the end of 2020, over a three year period (from 2021 to 2023).  However, eight states have a ‘trigger clause,’ which means that if the federal funding falls below the rates promised in the ACA, the expansion in that state is eliminated immediately. The following states have a trigger clause: Arkansas, Illinois, Indiana, Michigan, Montana, New Hampshire, New Mexico, and Washington.

The BCRA is proposing significant cuts to the traditional Medicaid program, as well.  These cuts will unequivocally impact a substantial number of Americans:

  • Medicaid covers nearly 75 million people in the U.S., including children, people with disabilities, pregnant women, and seniors.
  • Approximately 25% of the U.S. population obtains health care coverage through Medicaid.
  • Medicaid covers 49% of all births in the U.S.
  • Medicaid covers 39% of all children and 76% of children in poverty.
  • The number of people on Medicaid in the U.S. is equivalent to the populations of these states combined: AK, HI, OR, NV, ID, UT, MT, WY, CO, NM, ND, SD, NE, KS, OK, MN, IA, AR, LA, MS, AL, KY, WV, SC, DE, CT, RI, NH, VT, and ME.

In addition to funding cuts, it would move the Medicaid program to a block grant system where states would receive a fixed amount of money per enrollee and if that money runs out during the year, states would have to decide whether to cut enrollment, cut coverage, raising taxes, or all three. This prior blog post provides some additional information about how block grants work.

The BCRA also proposes adding work requirements as a condition of receiving Medicaid. While work requirements may seem like a reasonable condition to gaining access to Medicaid, they may negatively impact certain populations. For example, individuals who are in cancer treatment and are unable to work, but don’t meet the very strict eligibility requirements for Social Security Disability benefits. The proposed language in the BCRA, does not provide a definition of disability, which further confuses the issue.

Next Steps

Shortly after release yesterday, four Republican U.S. Senators [Sens. Rand Paul (KY), Ted Cruz (TX), Ron Johnson (WI), and Mike Lee (UT)] announced their opposition to the bill, arguing that it should go further to repeal the ACA and further cut financial support for access to health insurance coverage.

In order for the bill to pass the Senate, the Republican Leadership need 51 votes in support.  There are 52 Republican Senators and 48 Democratic and Independent Senators. If there is a 50-50 tie, the tie can be broken by a vote from the Vice President of the United States, who is a Republican.

This suggests that in order to pass the bill, Senate leadership will need to make further changes.  However, making further cuts to our health care system may cause some moderate Republicans to pull their support for the bill. There are a number of Republican Senators who have expressed concerned over the cuts to Medicaid, such as Senator Shelley Moore Capito, who represents West Virginia, where 42% of all children in the state are covered by Medicaid.

Do You Need Health Insurance Now?

If you do not have health insurance coverage, you can apply for Medicaid at any time or purchase a policy through the State Health Insurance Marketplaces if you qualify for a special enrollment period.

  • For more information about how to choose a health insurance policy (including making choices between employer-sponsored options), watch our recorded webinar.
  • If you aren’t sure what your health insurance options are or want to understand more about health insurance, visit CancerFinances.org.

 What You Can Do

  • Contact your U.S. Senators and share your health care concerns, by calling (844) 257-6227. Even if you’ve called before, please call again. Even if you know how your Senators will vote, please call to share your thoughts.
  • To find your elected officials or learn more about becoming an advocate, visit our Advocacy resource page. You can also find the Facebook and Twitter handles for the current members of Congress here.

Stay tuned to our Blog and sign up for our newsletter, as we will continue to provide updates as more information becomes available, about this issue that affects all of us.