Senate’s Draft Health Care Bill – What’s In It
Friday, June 23, 2017
Senate Republicans’ proposal to rewrite the Affordable Care Act (ACA or “ObamaCare”) would scale back federal funding for Medicaid, change subsidies available to help low- and moderate-income people buy private insurance, end the mandate that most people buy insurance and repeal taxes that helped expand coverage to about 20 million Americans.
AASC will keep members informed as the legislative process unfolds in the Senate regarding this bill. In the meantime, you may want to begin collecting personal stories from your residents (and yourself if affected by the bill) regarding how they will be impacted by this bill for advocacy and education efforts in the very near future.
Here are some of the preliminary effects of the draft bill:
- Subsidy to reduce the cost of premiums: You could lose all or some of your subsidy, which is now available to people earning up to $84,650 for a family of three. That income limit would be lowered slightly and would become less generous. The changes amount to about a 15% cut for those who would qualify.
- Subsidies for purchasing health insurance on the exchanges: The bill would sunset in two years subsidies for people who purchase insurance on an exchange. Most of the more than six million Americans benefiting from the help may not be aware they’re getting it, since the subsidy goes directly to the insurer who then lowers the cost-sharing requirements for a plan. Without the subsidies, insurers would need to raise rates an estimated 20% to make up for the loss, experts have estimated. But the bill also includes funding for states to reduce insurance costs in other ways.
- Prohibition on charging older people more: The bill would eliminate the ACA's requirement that insurers can't charge older customers more than three times what younger customers pay for the same coverage. Instead, those in their 60s could be charged five times as much, or more.
- Expanded Medicaid: If you are among the more than 14 million Americans who gained eligibility through the Affordable Care Act, you could lose it, but not for a few years. Enhanced federal funding for the low-income adults who became newly qualified under the ACA would be phased out, ending after 2024. Federal support for traditional Medicaid would also be scaled back. States, which pay a portion of the cost of Medicaid, would have to find new funding or cut the program through restricting enrollment, curbing benefits, reducing payments to health care providers or finding efficiencies. The Medicaid per capita caps in the House-passed “American Health Care Act” bill already required large state cuts. Now those will be much bigger.
- Tax penalties for not purchasing health insurance: The bill effectively removes the ACA’s requirement that most people buy insurance by eliminating the tax penalties for failing to do so. For 2015, 6.5 million taxpayers owed the IRS a penalty for not having insurance. While unpopular, the coverage mandate was included in the ACA to encourage healthy people to buy insurance, which spreads the risk to insurers and reduces the cost of plans. Actuaries expect premiums to rise without the mandate.
- Mandate for employers to offer health insurance: The bill would end the ACA’s penalties for larger employers who don't offer insurance to workers. The nonpartisan Congressional Budget Office has said fewer employers will offer coverage if that change is made.
- Substance abuse/addiction treatment services: The bill includes $2 billion for grants to states for addiction services, a response to concerns that cutting spending for Medicaid would curtail access to treatment programs. Critics say that’s not nearly enough.
- What federal subsidies will let your pay for: If you receive federal help to buy insurance on an exchange, you could not use the subsidy to pay for a plan that covers abortion services. There’s an exception for abortions performed to save the life of the mother, or to end a pregnancy that resulted from rape or incest.
- Planned Parenthood: The bill would block Planned Parenthood from receiving Medicaid funding for a year. The federal government already prevents Medicaid patients from receiving abortion services. But the bill would also block them from using Planned Parenthood for contraception, testing for and treatment of sexually transmitted diseases, and other services.
- State requirements: The bill would make it easier for states to waive requirements that insurance plans cover specific benefits. Before the ACA, many plans did not cover mental health or maternity care, and some did not cover pharmaceuticals. Some other services were available only at an extra cost. While the ACA already allows states to seek permission from the federal government to waive insurance rules, the Senate bill would remove the requirement that any changes not result in a reduction in coverage or more expensive plans. The bill would also end the ACA's requirement that insurers spend a specific amount of the premiums they collect on benefits, instead of on profits, administration and other expenses.