Here’s What Just Got Added to the Senate’s Health Care Bill

Here’s What Just Got Added to the Senate’s Health Care Bill

Senate Republican leaders released another draft of their health care bill on Thursday, attempting to advance their long-standing goal of repealing and replacing the Affordable Care Act despite doubts that their bill has enough support to pass—or perhaps even to proceed to debate on the Senate floor.

While the non-partisan Congressional Budget Office has not yet scored Thursday’s draft of the Better Care Reconciliation Act, the bill is largely similar to the version released on June 22. Both bills would restructure Medicaid, sharply reducing federal payments to the program over time. Both would do away with the requirement that most people buy insurance or pay a penalty and would weaken protections for those with pre-existing conditions, increasing premium costs dramatically for many with chronic conditions while lowering them for other, healthier individuals.

The bill also includes a grab bag of changes meant to garner support from senators with various concerns. Here’s a look at what’s new in Thursday’s draft:

More Money

The new Senate bill includes an additional $45 billion for opioid treatment over previous drafts and a provision that allows those with private insurance to use money from Health Savings Accounts (HSAs) to pay for their premiums (unless the plan covers abortion), beginning in 2018. Currently, for those under age 65 HSAs can be used to pay for certain out-of-pocket costs like co-pays, but not premiums.

Also, anyone would be allowed to purchase catastrophic plans and use federal subsidies to pay for those plans. (Under the ACA, individuals up to age 30 can enroll in this type of coverage.)

But the biggest change is the inclusion of an amendment written by Republican Senators Ted Cruz of Texas and Mike Lee of Utah. The current draft would allow insurers to offer plans that do not comply with certain regulations so long as they also offer an ACA-compliant plan. These regulations include essential health benefits (coverage of 10 benefits ranging from maternity care to prescription drug coverage), the prohibition on denying coverage to people with pre-existing conditions, the prohibition on charging more based solely on gender, coverage of preventive services, and limits on annual out-of-pocket maximums.

The senators have said this will offer more “freedom” to the consumer, but experts—and the insurance industry itself—say it will likely lead to millions of people with pre-existing conditions being priced out of the market, as healthy, younger people flock to less-expensive, less-comprehensive plans and those with any type of medical condition opt for the ACA-compliant plans, setting up de-facto high-risk pools. Around 1.5 million people with pre-existing conditions would be priced out of the market if those goes into effect, an analysis by the nonprofit Kaiser Family Foundation found.

“The ACA-compliant plans will become more and more expensive every year because they are only covering people who need the services,” says Dania Palanker, assistant research professor at the Center on Health Insurance Reforms at Georgetown University. “It’s not just people who are sick, it would be pregnant people or people who have a family history of cancer and don’t want to risk not having that cancer coverage.”

The bill adds an additional $70 billion between 2020 and 2026 to help off-set rising costs for the sickest individuals.

Click here to learn more about “freedom” and “choice” in health insurance.

More Taxes

Notably, Thursday’s bill eliminates the tax breaks for wealthy households that were included in prior versions of the health care bill. In other words, it leaves these Affordable Care Act tax hikes in place. These include an additional payroll tax of 0.9% on taxpayers with income above $200,000 for individuals and $250,000 for couples and a net investment income tax of 3.8% levied on capital gains, dividends and other unearned income for the same cohort of high earners.

While supporters of the tax cuts called the original taxes job killers, critics slammed efforts to reduce the wealthy’s tax burden, saying prior bills made the reverse Robin Hood move of giving to the rich and taking from the poor in the form of steep cuts to Medicaid. Under prior iterations of the bill, cuts to services and supports for lower-income people would help make up for the revenue lost from the tax cuts. Leaving the taxes in place will partly quell those criticisms and also may help the bill meet the savings goals that it would need to pass the Senate with just 50 votes.

Thursday’s bill does include a new tax sweetener for more affluent families, in the form of the expanded use of health savings accounts. Higher earners disproportionately benefit from HSAs because they have more income to sock away in these tax-favored accounts, and because their tax bracket is higher they get a larger tax break from them than lower-income HSA contributors.



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Updated: July 13, 2017 — 11:30 pm

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