The Healthcare Policy Debate: Part IV--Last Ditch Efforts

This is the fourth in a series analyzing the political and policy aspects of the recent healthcare debate. Part I was a political analysis of the first House bill. Part II evaluated the second House bill, HR 1628. In Part III, we took up the Senate bill. Here, the major elements of the proposed amendments to the Senate's bills will be presented in chronological order.

AMENDED SENATE HEALTH CARE BILLS

Dubbed the Obamacare Repeal Reconciliation Act, this bill was posted by the Budget Committee on July 17, 2017. This bill:

• Repeals the ACA mandates of 2016
• Removes the premium and cost sharing subsidies due to take effect on 2020
• Retains private market rules
• Prohibits tax credits for plans covering abortion, beginning in 2018
• Keeps health insurance marketplaces and open enrollment periods
• Eliminates the Medicaid expansion
• Disallows Medicaid funding of Planned Parenthood clinics for one year
• Repeals all ACA revenue provisions

The Health Care Freedom Act was proposed in the Senate on July 27, 2017. This bill:

• Repeals the ACA's individual mandate, and suspends the employer mandate until 2025
• Retains private market rules
• Keeps health insurance marketplaces and Open Enrollment periods
• Changes some state waiver process provisions to expedite applications process and extend waiver periods 
• Disallows Medicaid funding of Planned Parenthood clinics for one year
• Increases fiscal year 2017 funding for Community Heath Centers by $422 million
• Suspends the medical device tax for three years
• Increases the maximum annual contribution to Health Savings Accounts for three years

The Graham-Cassidy-Heller-Johnson Amendment (to HR 1628), referred to as Graham-Cassidy, was proposed in September of 2017. This bill:

• Repeals the ACA mandates of 2016
• Removes the premium and cost sharing subsidies
• Replaces these subsidies, as well as Medicaid expansion funding, with a state block-grant program (costing $1.176 trillion over seven years)
• Retains some private market rules, and allows states to set rules for coverage under the block grant program
• Repeal the authority to cover Medicaid expansion for adults by 2020
• Converts federal Medicaid funding to a per capita allotment, and limits federal Medicaid spending growth, starting in 2020
• Adds a state option to require work as a condition of eligibility for Medicaid
• Encourages the use of Health Savings Accounts
• Disallows Medicaid funding of Planned Parenthood clinics for one year
• Increases fiscal year 2017 funding for Community Heath Centers by $422 million
• Repeals some ACA revenue provisions, keeping the medical device tax 

Did I mention that all three failed???





With thanks to KFF

The Healthcare Policy Debate: Part III--Inside the Senate Bill

This is the third in a series analyzing the political and policy aspects of the current healthcare debate. Part I was a political analysis of the first House bill. Part II evaluated the second House bill, HR 1628. In Part III, we will take up the Senate bill. Called the Better Care Reconciliation Act, it was initially released on June 22, 2017, and updated four days later.

The Senate's health care bill was not assembled from the ground up. Rather, it is a modification of the House's bill. As such, they will be presented together, in the same format, and with their similarities and differences highlighted.

A COMPARISON OF THE HEALTH CARE BILLS FROM THE U.S. HOUSE AND SENATE

Effects on INDIVIDUALS

The House bill maintains the mandate to be insured but removes the tax penalty for not doing so. 
The Senate bill repeals the mandate and, by definition, the penalty.

Moreover, in the House bill, subsidies for individual policy purchasers (the amount of which depends on the purchasers' income and the price of their premiums) would be supplanted by age-dependent tax credits that must be utilized for premium payments.
The Senate bill also repeals these subsidies but substitutes a tax credit eligibility formula based on the Federal Poverty Line. Subsidies amount to 58% of the actuarial value of a cheaper benchmark plan. 

HR 1628 prohibits these tax credits from being applied to any policy that covers abortion. 

The Senate bill does not change this provision.

Further, taxes on high earners, designated to help defray the costs of the Patient Protection and Affordable Care Act (also known as the A.C.A. and Obamacare), would be eliminated by the House. But, Medicare premiums increase for them.
Similarly, the Senate bill removes the A.C.A. taxes on high earners and increases their Medicare premiums.

Lastly, premium subsidies can be applied to policies not purchased on the exchanges in 1628.
The Senate bill restricts subsidy use to premium payment for policies offered on the exchange, but allows states to apply to waive this restriction.

Effects on EMPLOYERS

The requirement for employers--with over 50 full time employees--to offer health insurance would be dropped in the House bill.

The Senate bill keeps this provision.

In the House and Senate bills, the tax on high-end, employer-sponsored health plans is repealed.

Tax deductions for employers who receive subsidies to provide Medicare Part D are reinstated in HR 1628.
Such is the case in the Senate's bill, as well. 

Effects on INDUSTRY

Taxes imposed by the A.C.A. on insurers, pharmaceutical companies, medical device

companies, and tanning salons, would be repealed by 1628.

The Senate bill maintains this provision. 

Insurers are obliged to surcharge policy purchasers (by 30 percent) who were uninsured for more than 63 days before requesting coverage by a non-group policy.
In the Senate's bill, the 63 day grace period is kept but the penalty for a longer coverage lapse is a waiting period, as opposed to a surcharge.

Insurers must also continue covering dependents until they are 26 years of age.

This is unchanged in the Senate bill. 

The requirement to include abortion coverage is removed in both H.R.1628 and the Better Care Reconciliation Act (BCRA).

Effects on STATES

Most of the language in H.R.1628 impacts the states. The whopper is the cessation of federal payments for the A.C.A.'s Medicaid expansion. Further, the disbursement methodology is fundamentally altered. Specifically, the Medicaid program would no longer use a fee-for-service model, substituting an annual block grant approach.

The Senate bill also ends funding for Medicaid expansion and adopts a similar block-grant approach to state funding.

States would also receive subsidies to help the newly insured afford coverage, splitting $13 billion a year for ten years. An additional $8 billion over five years is allocated to support state funded high-risk pools. Finally, $15 billion is allotted for certain types of specialty care, and another $15 billion for reinsurance costs. Total cost, $153 billion.

BCRA starts with a total cost of $112 billion, $41 billion less than the AHCA. $50 billion of this is allocated for three years of reinsurance (2018-2021). The remaining $62 billion would be used for reinsurance, high risk pools, cost sharing, and provider payments, all between 2021 and 2026.

One group of provisions in the House bill allows states to request waivers of certain federal insurance regulations. Specifically, states would be permitted to apply for waivers of regulations that:

• require insurers to offer a defined minimum benefit package with no annual dollar or lifetime limits: The Senate bill does the same.
• limit the amount that insurance companies can charge older policy holders, relative to younger ones, to a ration of 3:1. [Without a waiver request, this defaults to 5:1.] BCRA mirrors this provision, except for moving its start date to 2019. 
• prohibit insurers from charging higher premiums for policies issued to people with preexisting conditions. [Additionally, to qualify for the waiver, the state must have a high-risk pool or equivalent, and only allow this benefit to be applied to individuals who have not have been continuously insured.] BCRA's position on this is unclear.

In both bills, states may require able-bodied Medicaid recipients to work in order to maintain their eligibility.

Health insurance marketplaces are maintained, and the use of health savings accounts (HSA) is incentivized primarily by increasing contribution limits, in HR 1628. 

The Senate's bill maintains insurance marketplaces and incentivizes HSA use, as well.

The Prevention and Public Health Fund is defunded by the House bill.

BCRA does not include this provision.

Planned Parenthood clinics are defunded for one year by the AHCA.

The Senate bill calls for a year of defundng, as well. 

Neither plan provides for selling health insurance products across state lines. 

Finally, BCRA allows for the creation of association health plans for small businesses.

The bill failed, in dramatic style,  because five Republican Senators voted against it. (There was only room to loose two and still pass the legislation.) They are: Ted Cruz of Texas, Ron Johnson of Wisconsin, Rand Paul of Kentucky, Dean Heller of Nevada and Susan Collins of Maine.

Special thanks to the Kaiser Family Foundation

The Healthcare Policy Debate: Part II--Inside The House Bill

This is the second part in a series analyzing the political and policy aspects of the current healthcare debate. Part I examined the first House bill from a political perspective. Part II assesses the second House bill, and Part III the Senate bill. The same discussion outline--categorizing elements of the bill by their Effects on Individuals, Employers, Industry and States--will be utilized in all parts of the series.

THE U.S. HOUSE OF REPRESENTATIVES BILL:

H.R.1628 was passed (with amendments) on May 4, 2017. The vote on an earlier version was cancelled by Speaker Ryan

because GOP defections made passage impossible. [See The Healthcare Bill Vote: Why Canceling It Mattered on THE PoP BLOG! for more on this.] Here are the details on 1628.

Effects on Individuals

The House bill maintains the mandate to be insured but removes the tax penalty for not doing so. Moreover, subsidies for individual policy purchasers (the amount of which depends on the purchasers' income and the price of their premiums) would be supplanted by age-dependent tax credits that must be utilized for premium payments.

These tax credits can not be applied to any policy that covers abortion. 

Further, taxes on high earners, designated to help defray the costs of the Patient Protection and Affordable Care Act (also known as the A.C.A. and Obamacare), would be eliminated. But, Medicare premiums increase for them.

Lastly, premium subsidies can be applied to policies not purchased on the exchanges.

Effects on Employers

The requirement for employers--with over 50 full time employees--to offer health insurance would be dropped in the House bill.

The tax on high-end, employer-sponsored health plans is also repealed.

Tax deductions for employers who receive subsidies to provide Medicare Part D are reinstated.

Effects on Industry

Taxes imposed by the A.C.A. on insurers, pharmaceutical companies, medical device companies, and tanning salons, would be repealed by the 1628.

Insurers are obliged to surcharge policy purchasers (by 30 percent) who were uninsured for more than 63 days before requesting coverage.

Insurers must also continue covering dependents until they are 26 years of age, and refrain from using gender in premium calculations.

The requirement to include abortion coverage is removed in H.R.1628.

Effect on States

Most of the language in H.R.1628 impacts the states. The whopper is the cessation of federal payments for the A.C.A.'s Medicaid expansion. Further, the disbursement methodology is fundamentally altered. Specifically, the Medicaid program would no longer use a fee-for-service model, substituting an annual block grant approach.

States would also receive subsidies to help the newly insured afford coverage, splitting $13 billion a year for ten years. Additionally, $8 billion over five years is allocated to support state funded high-risk pools. Finally, $15 billion is allotted for certain types of specialty care, and another $15 billion for reinsurance costs. Total cost, $153 billion.

One group of provisions in the House bill allows states to request waivers of certain federal insurance regulations. Specifically, states would be permitted to apply for waivers of regulations that:

• require insurers to offer a defined minimum benefit package with no annual dollar or lifetime limits
• limit the amount that insurance companies can charge older policy holders, relative to younger ones, to a ration of 3:1. [Without a waiver request, this defaults to 5:1.]
  
• prohibit insurers from charging higher premiums for policies issued to people with preexisting conditions. [Additionally, to qualify for the waiver, the state must have a high-risk pool or equivalent, and only allow this benefit to be applied to individuals who have not have been continuously insured.]

States may require able bodied Medicaid recipients to work in order to maintain their eligibility.

Health insurance marketplaces are maintained, and the use of health savings accounts is incentivized primarily by increasing contribution limits, in the House bill.

The Prevention and Public Health Fund, and Planned Parenthood clinics, are defunded.

Stay tuned for Part II of this series, which will take up the Senate's healthcare bill... as soon as it passes.

Special thanks to the Kaiser Family Foundation