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Better Care Reconciliation Act

Bill Number: HR-1628S

Disposition: 2017-Jun-22
Failed to pass Senate

The bill will not become law.

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Repealing (and Replacing?) Obamacare

Other names for this bill

This bill is referred to as the Better Care Reconciliation Act (or BCRA).

Because of the complicated way this bill has been discussed and modified in both the House of Representatives and the Senate, we are documenting three versions. Two were preliminary ones considered by each house of Congress...

o This version is the one originally considered by the Senate. It did not receive enough support to pass.

o The version originally passed by the House of Representatives - the American Health Care Act (AHCA).

The third is the bill the Senate agreed on July 25 to debate. It is the only version that has a chance to become law. if passed by the Senate, it will need to be reconciled with the House through a conference committee.

Click here
for our discussion of that version (also named the American Health Care Act).

This would become the nation's health care policy

For the past four years, the Patient Protection and Affordable Care Act (Obamacare) has been our national health care policy. This bill would replace that.

In the sections below, we'll explain what the law would do. For an explanation of how changes would effect you, see our discussion of this issue.

Some Obamacare provisions would remain

There are a few features of Obamacare that would remain in the BCRA....

o Insurance policies would not be permitted to specify an annual or lifetime limit to benefits.

o Policies still would need to cover essential health benefits.

o Children under age 26 would be able to remain covered under a parent's policy.

o You could not be denied coverage or charged more for pre-existing conditions (though those with pre-existing conditions likely would end up paying much more).

States could opt out of some protections

States would be allowed to exempt insurance companies from providing any of the essential benefits.

Assistance would be similar to Obamacare - but less

The BCRA would provide assistance to pay for health care insurance by refundable tax credits.

The amount of assistance you would be eligible for would depend on your age and your income. This is similar to Obamacare, but with a few key differences...

o Under Obamacare, you are eligible to receive assistance if your income is less than 4 times the federal poverty level (FPL). Under the BCRA, you would be eligible only up to 3.5 times the FPL.

o The amount of the subsidies will be less. Under Obamacare, the amount of assistance is based on the cost of a silver level plan. Under the BCRA, the amount would be based on the cost of a bronze plan. Because you would receive less assistance, a policy with the same actual monthly cost to you would cause you to spend more out-of-pocket for health care.

Premiums would be more sensitive to age

Under Obamacare, insurance companies can adjust premiums based on the age of the insured person. The maximum an older person can be charged is 3 times the amount charged to a younger person

The BCRA would allow insurance companies to charge an older person 5 times the amount charged to a younger person (states could restrict that). This would allow companies to charge less to young (typically healthier) people.

You no longer would be required to buy insurance

This bill would eliminate the requirement that virtually everyone obtain health care insurance that meets standards established by the law (referred to under Obamacare as the mandate.

Medicaid would be scaled back drastically

This bill would phase out Obamacare's Medicaid Expansion program.

Those who live in states that have expanded Medicaid and who are in the program as of 2023 will be able to remain covered by Medicaid Expansion as long as their income remains below the poverty level. The federal government would not pay to cover new people under the program. Also, if someone currently covered by Medicaid Expansion becomes ineligible for more than a month after 2023, that person would not be able to receive the coverage again.

In other words, the Medicaid Expansion program would be phased out by attrition.

Medicaid itself would change too. States currently are reimbursed for Medicaid expenses based on how much they spend. Under the AHCA, states would receive either a fixed amount or an amount per covered person (though that amount would be significantly less than states are reimbursed under Obamacare).

There is one situation in which low-income people would fare better under the BCRA than they do under Obamacare. Because Medicaid Expansion covers those who earn less than the poverty level, subsidies were not available to these people under Obamacare (because Medicaid provided them free health care anyway). In states that turned down Medicaid Expansion, those low-income people were left with no assistance. The BCRA would provide subsidies to those earning less than the federal poverty level, so they would have some help in buying insurance (however, they still might not be able to afford either the premiums or out-of-pocket costs).

Money saved would go to the wealthiest

Obamacare pays a large portion of its costs with increased taxes on high-income people and health care companies...

o An approximate 1 percent to the Medicare payroll tax on incomes greater than $200,000.

o A 3.8 percent Net Investment Income Tax for individuals with incomes greater than $200,000.

o Companies normally can deduct from their taxable income salaries they pay executives up to $1 million per executive. Obamacare limits that deduction for healthcare-related companies to earnings under $500,000.

o Annual fees on pharmaceutical manufacturers and insurance companies.

o Tax penalties collected from those who don't purchase required insurance (Mandate tax - which are used to keep prices lower.

Under the BCRA, all those taxes, fees, and restrictions would be eliminated. Thus, the higher healthcare expenses that would be paid by low- and middle-income earners would be returned to people who earn more than $200,000 a year.

No money for Planned Parenthood and abortions

In order to receive the assistance to pay premiums that we explained above, any insurance plan purchased cannot include coverage for an abortion.

Also, the BCRA would prohibit any federal money being given to Planned Parenthood.

Most provisions would be phased in

Some provisions of this bill, such as eliminating the mandate to buy insurance, would take effect immediately.

Most provisions of the bill, including the changes to assistance and Medicaid, would be phased in over the next 5 years.

This bill cannot be filibustered

Congress is using the budget reconciliation process to attempt to pass this bill. That makes it immune from a filibuster in the Senate.

This could possibly result in some changes to the Senate bill. The reconciliation process is limited to provisions that directly affect the budget. Changing the rule about disallowing insurance policies that pay for abortions may not fall under that scope. The Senate parliamentarian is expected to issue a ruling on that. The ruling, however, will be non-binding, and the Senate leadership may choose to ignore it or find a workaround that achieves the same result.

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