As you know, the American Health Care Act (AHCA) was introduced March 6, 2017 as the bill that would repeal and replace the Affordable Care Act (ACA). The U.S. House of Representatives voted on and passed this bill on May 4, 2017. Subsequently, the Congressional Budget Office (CBO) released their review of AHCA, prompting some Senate legislators to voice concern over the bill in its current state. Revisions were expected and those revisions are now drafted.
What Happened Last Week: Better Care Reconciliation Act (BCRA)
The Senate’s revised draft of the AHCA bill, titled Better Care Reconciliation Act (BCRA), was drafted by Senate Majority Leader Mitch McConnell and released on Thursday, June 22, 2017. Some BCRA highlights include:
- The employer mandate (employers with 50+ employees must provide affordable and ‘minimum value’ insurance) penalty would be reduced to zero
- Cadillac tax would be delayed until 2026
- Medicaid expansion (introduced by ACA) would be phased out over 3 years, starting in 2021
- Requirements would be more lax for states to request waivers to offer health care plans that don’t include the 10 essential benefits (such as mental health, maternity care and emergency services)
- ACA reporting requirements for large employers would still remain in effect (although it is in question whether it will be enforced or not)
- Health Savings Accounts (HSA) would expand in the following ways:
- Contributions would increase to $6,550 for single and $13,100 for family
- Could be used to pay for over-the-counter medications (prohibited under ACA)
- Tax penalty would decrease to 10% if individuals used HSA to pay for unqualified medical expenses
- Both spouses could make catch-up contributions to one HSA effective 2018
This Week: CBO to Estimate Cost of BCRA
The CBO’s analysis of BCRA leaves 22 million fewer Americans with health insurance by 2026 than under ACA (under AHCA, the CBO’s estimated that 23 million fewer people would have coverage). The number of uninsured under BCRA is estimated to be 49 million. The federal deficit would potentially reduce by $321 million (compared to $202 billion under AHCA).
Other key findings from this analysis include:
- Premiums would increase in 2018 and 2019 but decline after that
- Deductibles and out-of-pocket costs would increase considerably
- Individual insurance markets would remain stable
- The new waiting period provision would slightly increase the number of people with insurance throughout the 2018-2026 period
The Senate is fast-tracking this bill so a vote could take place as early as next week. They want the vote to be done prior to their July 4th recess or support for the legislation could be lost. Currently, it doesn’t look like there is enough Republican support for the bill to pass.
Next Steps: What to Watch For
If the BCRA is passed by Senate, it will go back to the House. Three things could happen: the House can pass the bill as-is, pass another version of the bill and send to the Senate for a vote, or have key leadership in both chambers have private negotiations to find a middle ground that will achieve agreement on both sides. Lawmakers hope to pass the final legislation for this bill by the end of July.
NIS will continue to monitor the situation and keep you informed. Contact your NIS Consultant if you have any questions.
National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.
