Republican Senators Release Health Care Proposal

Senate Republicans have released their version of a health care reform repeal and replace bill, which they call the Better Care Reconciliation Act (BCRA). Five Republican Senators have already stated that they cannot vote for the bill in its present form, making changes before a vote a virtual certainty.

There are a number of differences between the Senate bill and the American Health Care Act (AHCA) passed by the House last month, including:


  • The BCRA phases out Medicaid expansion from 2021 to 2024. Cuts Medicaid funding after that.
  • The BCRA modifies the individual tax credits (subsidies), with credits based on age and income, up to 350 percent of the federal poverty level (FPL), whereas the Affordable Care Act (ACA) allows tax credits up to 400 percent of the FPL. Under the BCRA, individuals would not be entitled to tax credits if they are offered employer coverage, without regard to affordability. Subsidies would be based on the average cost of a bronze plan, rather than the second-lowest cost silver plan as it is under the ACA.
  • The BCRA eliminates federal requirements regarding minimum loss ratios (MLRs), but requires each state to establish its own rules regarding MLRs and rebates.
  • The BCRA allows for the establishment of association health plans as large group plans for small businesses and/or individuals. These plans would be exempt from the community rates and essential health benefit requirements imposed on small group and individual policies.
  • The BCRA has no penalty for failing to have continuous coverage, but the bill has already been modified to add a provision that people electing coverage after a gap of more than 62 days will have to wait 6 months before getting coverage. The parliamentarian has not yet ruled as to whether that provision meets the requirements of the budget reconciliation process.
  • The BCRA expands the ACA’s waiver process to give States more flexibility with respect to many of the ACA’s requirements, such as essential health benefits. Unlike the AHCA, there is not a specific provision to allow States to waive the community rating requirements, which would allow insurance companies to charge higher premiums to people with pre-existing conditions.
  • The BCRA includes $2 billion in 2018 for States to fight the opioid crisis.

There are also a number of provisions that the BCRA and AHCA have in common, including:

  • No penalties for individuals without minimum essential coverage, retroactive to 2016.
  • No penalties for employers that fail to offer minimum essential coverage or coverage that fails to meet affordability and minimum value standards, retroactive to 2016.
  • The Cadillac tax would be delayed until 2026, with all other new taxes repealed, with a variety of effective dates.
  • Repeals limits on health flexible spending accounts (FSAs).
  • Increases limits on health savings accounts (HSAs). Allows spousal catch-up contributions to the same account as an employee. Allows expenses incurred within 60 days before establishing HSAs to be considered qualified medical expenses. Reduces the penalty for using money in HSAs for non-qualified expenses from 20 percent to 10 percent.
  • Allows FSAs, health reimbursement arrangements and HSAs to reimburse over-the-counter drugs without a doctor’s prescription.
  • Increases the maximum older individuals can be charged to 5 times what younger individuals are charged. Allows States the flexibility to use different ratios.
  • Restructures Federal financing of Medicaid. Allows States to impose a work requirement on individuals who are not disabled, elderly or pregnant.
  • Defunds Planned Parenthood for one year.
  • Prohibits the use of subsidies to pay for policies that cover abortions.

The Congressional Budget Office (CBO) has released its analysis of the BCRA and says that 15 million people would lose coverage in the first year and after 10 years 22 million fewer people will have coverage. The CBO also says that premiums and deductibles will rise initially.

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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