Hopefully below will help those not able to open the attachments in the previous posts:
Senate Republicans Release Draft Health Reform Bill
Key Points:
- The Senate bill would phase out Medicaid expansion over three years; repeal most Affordable Care Act taxes; provide stabilization funds; and provide tax credits for purchasing on the individual market.
- Four Senate Conservatives have already indicated they do not support the bill in its current form.
On June 22, Senate Republicans released their draft bill which would repeal and replace portions of the Affordable Care Act (ACA). The Senate bill, entitled the "Better Care Reconciliation Act of 2017," will be a substitute amendment to the House-passed American Health Care Act (AHCA). According to a summary from the Senate Budget Committee, the Senate bill will help stabilize collapsing insurance markets; free the American people from onerous Obamacare mandates; improve the affordability of health insurance; preserve access to care; and strengthen Medicaid. The Congressional Budget Office is expected to complete its score early next week with Republican leadership expecting to vote before the July 4 recess. Notably, a group of four conservative Republican Senators have expressed opposition to this proposal, suggesting that it falls short of full repeal of Obamacare in several aspects. In order to pass the legislation, Republican leaders must try to address their concerns in the amendment process, because they can afford to lose no more than 2 votes given the opposition by all 48 Democratic Senators.
The Senate bill would provide a short-term stabilization fund to help address access and coverage disruption with $15 billion per year provided in 2018 and 2019 and $10 billion provided per year in 2020 and 2021. Cost-sharing reduction payments would continue through December 31, 2019. The bill would eliminate most of the ACA taxes except the Cadillac tax which would be delayed until 2026. It also would repeal both the individual and employer mandates.
The Senate bill would phase-out Medicaid expansion over three years. States would have the option to choose between per-capita funding or a block grant. Beginning in 2025, the spending growth rate would be tied to the rate of increase in the consumer price index for urban consumers (CPI-U). The CPI-U generally has slower rate of increase than the medical CPI which was used in the House bill.
Beginning in 2020, the tax credit will be available to those whose income does not exceed 350 percent of the federal poverty line. The tax credit would be tied to a benchmark plan with an actuarial value of 58 percent, a decrease from the 70 percent required by current law. The credit would also vary based on the individuals rating area and age.
The bill would amend the ACA's Section 1332 waivers to give states even more flexibility to modify their insurance markets. The state application could include a waiver of the ACA's essential health benefit requirements. The bill would change the age band ratio to five to one or other ratio the state may determine. States would determine the medical loss ratio. The bill would not change the requirements related to pre-existing conditions or cover for young adults up to age 26.
The four conservative Senators that have come out against the text released yesterday are: Ted Cruz (R-TX), Ron Johnson (R-WI), Mike Lee (R-UT), and Rand Paul (R-KY). Senator Paul said that "it does not appear this draft as written will accomplish the most important promise that we made to the American people: to repeal Obamacare and lower their health care costs." Senator Cruz has called for an amendment that would allow catastrophic, low premium plans. One proposal this group may support to lower premiums is to allow an insurance company that offers at least one plan that satisfies the mandates in the law to offer any other variety of plans that are desired by consumers.
The passage of this legislation remains highly uncertain. One thing is clear, Congressional Republicans are under immense pressure to finalize a proposal before leaving for the August recess. Due to political reasons, it is very hard to imagine a successful legislative outcome that can be finished after the recess. In the last several weeks, Republican leaders have raised the possibility of delaying recess in order to complete consideration of ACA repeal legislation. Given the opposition by Senator Cruz and others, the bill will need to undergo further amendment in the coming week to secure their support. If Leader McConnell moves forward with a planned vote next week, that gives them just days to work on amendments that could help secure the support of at least two of the conservatives that are currently opposed. Further complicating this process is the potential concerns of Senate moderate Republicans, including Senators Susan Collins (R-ME), Lisa Murkowski (R-AK), and other Senators that live in states that expanded Medicaid [i.e. Senator Dean Heller (R-NV) and Senator Rob Portman (R-OH)]. Any attempt to secure the support of the conservatives must also avoid losing support from key moderates.
The Administration has indicated support for the Senate bill. The House is in "wait and see" mode, and will determine a path forward if the Senate is able to send them a product.
Many uncertainties remain in this process, but at this point we believe that there is still a fair chance that McConnell is able to get a bill in some form through the Senate in the coming weeks. However, it is not at all clear that this will be a product that the House can support, or if they will need to make further changes. In either case, the next six weeks will be crucial if Republicans hope to send an ACA repeal bill to President Trump's desk.
Below is a further summary of some of the major provisions in the bill, and attached is the text of the legislation and a section-by-section summary prepared by Senate Republicans.
Matt
Taxes
The Senate bill would repeal several of the taxes in the ACA:
- The tax on Cadillac plans applying to taxable years beginning December 31, 2019. However, this repeal will not apply to taxable years beginning after December 31, 2025.
- The tax on over-the-counter medications applying to taxable years beginning December 31, 2016.
- The tax on health savings accounts applying to distributions made after December 31, 2016.
- The tax on prescription medications applying to calendar years after January 1, 2018.
- The tax on medical devices applying to sales after December 31, 2017.
- The chronic care tax applying to taxable years beginning after December 31, 2016.
- The Medicare tax increase applying to taxable years beginning after December 31, 2022.
- The tanning tax applying to services performed after September 30, 2017.
- The net investment tax applying to taxable years beginning after December 31, 2016.
The Senate bill would repeal both the individual and employer mandates.
Insurance Stability and Market Reforms
The Senate bill would establish a short-term stabilization fund to address coverage disruption and provide support for states. The bill appropriates $15 billion per year for 2018 and 2019 and $10 billion per year for 2020 and 2021. These funds will go to the Centers for Medicare and Medicaid Services (CMS) to "fund arrangements with health insurance issuers to address coverage and access disruption and respond to urgent health care needs within states." Health insurers will be required to submit a notice of intent to participate to the Administrator of CMS.
The bill would also establish a long-term State Stability and Innovation Program which would be available to all 50 states. States will be required to submit an application to CMS describing how the funds will be used to: (1) establish or maintain a program to help high-risk individuals; (2) enter into arrangements with health insurers to stabilize the individual market; (3) provide payments to health care providers for the provision of services; or (4) reduce out-of-pocket costs for individuals enrolled in plans in the individual market. Funds would be appropriate in the following manner: $8 billion for calendar year (CY) 2019; $14 billion for CY 2020; $14 billion for CY 2021; $6 billion for CY 2022; $6 billion for CY 2023; $5 billion for CY 2024; $5 billion for CY 2025; and $4 billion for CY 2026.
The Senate bill would repeal the cost-sharing subsidy program for plan years beginning after December 31, 2019. The cost-share reduction payments would continue to be made through December 31, 2019.
The Senate bill would amend Section 1332 of the ACA to permit state further flexibility in seeking waivers. The Secretary would be required to establish an expedited application and approval process. The waiver would be in effect for eight years unless the state requests a shorter duration and may be renewed for additional, unlimited eight year periods upon application by the state. Under the bill, states would be permitted to change the age variation ratio for premium rates beginning after January 1, 2019. For plan years after January 1, 2019, states would set the medical loss ratio.
Medicaid and Tax Credits
Medicaid
Beginning in 2021, the Senate bill would reduce the amount of federal funds provided to states that have expanded Medicaid and by 2024 restore levels of federal support to preexisting law. Federal funds would be reduced to 85 percent for calendar quarters in 2021; 80 percent for calendar quarters in 2022; and 75 percent for calendar quarters after 2023. The bill would end the enrollment of "expansion enrollees" after December 31, 2017. The requirement to provide essential health benefits would sunset December 31, 2019.
The bill would provide safety net funding for non-expansion states by permitting an adjustment to the payment for providers that provide health care services to Medicaid enrollees. This payment increase may not exceed actual costs. The federal medical assistant percentage (FMAP) with respect these expenditures would equal 100 percent for FY 2018, 2019, 2020, and 2021; and 95 percent for calendar quarters in FY 2022.
The bill would allow states to review individual eligibility every six months for those whom eligibility is based on income starting October 1, 2017. States may also condition eligibility for nondisabled, nonelderly, or nonpregnant individuals on a work requirement beginning October 1, 2017. The work requirement is defined as participation in work activities for such a period of time as determined by the state. States would have to implement exceptions to the work requirement including for individuals or those who are the only caretaker of child under age six or who has disabilities.
The Senate bill would allow states to choose between a per-capita payment or a block grant for Medicaid beginning in 2020. For per-capita payments, states will be required to submit a base period to the Secretary by January 1, 2018 that is based on a period of eight consecutive fiscal quarters selected by the state. An annual inflation factor will be applied to these payments for fiscal years before 2025, the increase will be based on the medical care component of the consumer price index for all urban consumers. Beginning in FY 2025, the inflation factor will be based on the percentage increase in the consumer price index for all consumers (CPI-U).
For the block grant option, beginning in FY 2020, states could submit an application for a Medicaid Flexibility Program. This application must describe the program including the duration and types of services that would be provided. The state application must be open for a 30 day notice and comment period that includes public hearings on the proposed Medicaid Flexibility Program. For the first fiscal year, the block grant funds will be equal to the federal average medical assistance matching percentage. For subsequent fiscal years, the amount of funds will be increased by the percentage increase in the CPI-U.
Tax Credits
The Senate bill would establish advanceable and refundable tax credits for all individuals whose income does not exceed 350 percent of the federal poverty line. The tax credit would be tied to an applicable median cost benchmark plan which is the qualified health plan offered in the individual market in the rating are where the individual resides that (1) provides 58 percent of the full actuarial value of the benefits; and (2) has a premium that is the median premium of all qualified health plans in the rating area. The Senate bill includes a table for the modification of the tax credit percentage based on income and age.
Health Savings Accounts
The Senate bill would increase the maximum contribution limit for health savings accounts. For individuals, the maximum limit would increase from $2,250 to $5,000. For family coverage, it would increase from $4,500 to $10,000. These changes would be effective for taxable years beginning after December 31, 2017. The Senate bill would also permit both spouses to make catch-up contributions to the same HSA.
Opioid Crisis
The Senate bill would appropriate $2 billion for FY 2018 for the Department of Health and Human Services to provide grants to states to support substance use disorder treatment and recovery support services for individuals with mental or substance use disorders.
Matthew B. Hoekstra
Principal
Williams & Jensen, PLLC
701 8th Street, NW | Suite 500
Washington, D.C. 20001
Office: 202.659.8201
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Tyler Keeney
Membership Associate
Idealliance
Alexandria VA
703-837-1070
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Original Message:
Sent: 06-26-2017 12:31 PM
From: Ken Garner
Subject: Senate Health Care Bill
Don,
See if this works.
Ken