Congress Changes Stance on ACA Repeal and Replace
On Tuesday, July 25, the U.S. Senate will likely vote on a “Motion to Proceed,” which is the first step for the Senate to open debate on health reform legislation. If the motion passes, they may consider a 2015 bill that will repeal the Affordable Care Act (ACA) without replacing it for two years, or the Better Care Reconciliation Act (BCRA), the recent Senate bill to repeal and replace the ACA. There is also a possibility that the Senate could consider the House passed American Health Care Act (AHCA). Any of these bills would reduce coverage, raise premiums for people with pre-existing conditions, and put at risk thousands of those with hematologic diseases and disorders that rely on Medicaid.
The Senate released an updated version of the Better Care Reconciliation Act (BCRA) on July 13, legislation to repeal large provisions of the Affordable Care Act (ACA). The modifications to the bill - that include additional funding for opioid addiction treatment and for market stabilization, among other changes - were an effort to win support from Republican Senators still opposed to the previous version of BCRA. However, as of July 17, four Senate Republicans opposed the bill, meaning the Senate would not have enough votes to pass the legislation.
The previous version of BCRA which was released on June 22, 2017, came two months after the House passed version of a repeal bill (AHCA), which passed the House on May 4, 2017. There was speculation that the Senate bill would differ greatly from the House bill and provide greater protections to the most vulnerable Americans – the elderly, low-income, and those with lifelong chronic illness. However, the Senate bill does not differ significantly from the House legislation, and ASH opposes BCRA for the same reasons the Society opposed the AHCA, because of concerns that this piece of legislation will reduce overall access to coverage and treatment and would negatively impact patients with hematologic diseases and disorders.
The BCRA allows states to apply for waivers to opt out of certain ACA requirements. While the BCRA differs from the AHCA in that states cannot waive the community rating requirement, allowing insurers to charge higher prices to individuals with pre-existing conditions, the Senate bill does allow states to define the essential health benefits (EHBs), which include 10 categories of benefits such as hospital care and prescription drugs. EHBs ensure access to broad coverage, and many important patient protections in the ACA only apply to services defined as EHBs, including the elimination of annual and lifetime limits. Changes to EHBs would seriously undermine the ban on lifetime and annual caps and the annual maximum for out-of-pocket expenses. Additionally, under the ACA, if a state chose to waive a certain requirement, it had to ensure that coverage remain as generous, the same number of people are covered, and out-of-pocket costs are no higher. The BCRA removes these safeguards.
Under the ACA, states that chose to expand the Medicaid program, received and are still receiving enhanced federal funding to assist in the coverage of a broader Medicaid population. However, under the BCRA, beginning January 1, 2020, these increased payments will begin to be phased-out and will be fully eliminated by 2024. Additionally, the Senate legislation, similar to the House bill, will convert the Medicaid program to a per capita allotment or a block grant system – leaving the choice up to the states. The AHCA adjusts each state’s targeted spending amount by the percentage increase in the medical care component of the consumer price index (CPI). However, the Senate bill uses the same inflationary adjustment as the House until 2025 but then switches to the less generous CPI for all urban consumers. These changes would make it more difficult for states to respond to fluctuations in the price and demand for health care services.
The BCRA does away with the ACA subsidies, which were adjusted by income and location, and replaces them with income-based tax credits. While this is an improvement over AHCA, which linked the tax credits solely to age, the BCRA’s tax credits are less generous than the subsidies offered through the ACA, restricting eligibility to people with incomes not exceeding 350 percent of the federal poverty level, a reduction from the 400 percent cap under the ACA. Furthermore, the Senate bill would allow states to increase the age rating ratio from 3:1 to 5:1, significantly increasing the cost of coverage for older Americans. The legislation repeals the controversial individual and employer mandates, as well as the tax provisions, which were included in the ACA to finance the Medicaid coverage expansion. The AHCA replaced the individual mandate with a provision that required individuals with a lapse in coverage longer than 63 days to pay a penalty equal to 30 percent of their insurance premium for a year. The BCRA includes a provision which would make those who had a lapse in coverage for 63 days or more wait six months before obtaining insurance.
ASH is also concerned about the bill’s proposed elimination of the Public Health and Prevention Fund which has supported many critical projects at the Centers for Disease Control and Prevention (CDC), including investments in immunizations and health-care associated infections. Currently the Fund comprises approximately 12 percent of CDC’s budget and should be preserved.
The Congressional Budget Office, responsible for reporting non-partisan cost estimates for proposed legislation, has released scores for each version of health reform legislation currently being considered by the Senate. While each version will decrease the federal deficit, each will also significantly increase the number of uninsured Americans over the next decade.