Trumpcare Zombie Advances to Senate

The House of Representatives narrowly passed the American Health Care Act (AHCA), which had been given up for dead in March and now faces an uphill battle in the Senate. The AHCA (also referred to as Trumpcare) was given new life after additional money intended to bolster high-risk pools to cover preexisting conditions was added to the bill.

After the bill passed the House, Republicans held a celebration at the White House, prompting critics to compare the celebration to a football player spiking the ball after crossing the 50-yard line.

The AHCA:

  • Eliminates the employer mandate to offer affordable, minimum value coverage
  • Eliminates the mandate for individuals to have minimum essential coverage
  • Replaces the Affordable Care Act’s (ACA) income-based subsidies with tiered tax credits, which gradually increase for older Americans
  • Allows states to apply for waivers to define essential health benefits
  • Expands the limits for Health Savings Accounts
  • Discontinues Medicaid expansion in 2020
  • Repeals most of the ACA’s taxes, but only delays implementation of the so-called Cadillac tax until 2025
  • Allows health plans to charge older policyholders five times what they charge younger policyholders, rather than the 3:1 ratio allowed by the ACA
  • Allows insurers to place a 30 percent surcharge on premiums for people who let coverage lapse and then want to regain coverage
  • Allows states to impose work requirements for Medicaid recipients
  • Turns Medicaid into a block grant program
  • Creates high-risk pools for people with preexisting conditions
  • Eliminates funding for Planned Parenthood
  • Prohibits tax credits for policies that cover abortions (some states, such as California, require all medical policies to cover abortions)

In addition to the additional money for high-risk pools, the other big change from the version that died in March is the ability of states to apply for waivers to define the essential health benefits that must be covered by all individual and small group policies.

Changes to the bill in the Senate are a certainty. In order for Republicans to pass a bill without Democratic support, it will have to follow budget reconciliation rules. Under those rules, the Senate parliamentarian will not allow any provisions that do not relate to the Federal budget or that only have an incidental impact on the budget.

Among the provisions that may be stricken by the parliamentarian are the provisions that:

  • Allow states to apply for waivers to define essential health benefits
  • Allow health plans to charge older policyholders five times what they charge younger policyholders
  • Allow insurers to place a 30 percent surcharge on premiums for people with gaps in coverage
  • Allow states to impose work requirements for Medicaid recipients

Eliminating the employer and individual mandates probably violates the budget-related rules, but eliminating the penalties related to those provisions has previously been approved by the parliamentarian. Even the proposals to turn Medicaid into a block grant program and to create high-risk pools could be ruled incidental to the budget.

Republicans can only afford to lose two votes in the Senate and still pass the bill. According to knowledgeable lobbyists, there are more than three conservative Republican Senators who think the House bill spends too much money and leaves too much of the ACA in place.

There are also more than three Republican Senators, mainly from states that expanded Medicaid, who want more Medicaid funding than is in the House bill. Some experts have compared the search for a compromise between these two groups to a search for a unicorn.

Furthermore, there are at least three Republican Senators opposed to the provisions eliminating funding for Planned Parenthood and tax credits for policies that cover abortions. These conflicts explain why some people call the bill the Trumpcare Zombie.

 


John Garner

About John Garner

John Garner has over thirty five years of experience in employee benefits. He specializes in compliance, health care reform, the Health Insurance Portability and Accountability Act (HIPAA), the Consolidated Omnibus Budget Reconciliation Act (COBRA), and the Employee Retirement Income Security Act (ERISA). He helps clients with life, health, and disability benefits, cost containment, flexible benefits, and claim consulting.

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