Senate Leadership Unveils Revised Health Bill

Senate Republicans have released a revised version of their healthcare bill. Overall, it is similar to the earlier version of their repeal-and-replace bill.

This version of the Better Care Reconciliation Act (BCRA) has been modified from the prior version in a number of ways, including:

  • Retaining the Affordable Care Act (ACA) Medicare tax (0.9 percent) and net investment tax (3.8 percent) for high income individuals, both of which would have been eliminated under both the House bill and the earlier version of the Senate bill.
  • Adding a provision that says that in order for a high deductible health plan (HDHP) to qualify for health savings account (HAS) contributions, the HDHP cannot include coverage for abortions.
  • Allowing HSA contributions to be used to purchase health insurance, to the extent that premiums exceed any tax credit amounts allowed under the law.
  • Expanding the definition of qualified medical expenses for HSAs to include medical expenses for dependents up to age 26.
  • Allowing health insurance companies to offer catastrophic coverage that covers at least three primary care visits a year in any market without age restrictions, provided they offer at least one full coverage option in that market. Individuals could use premium tax credits towards the purchase of these catastrophic policies.
  • Adding $70 billion in new funding for insurance companies covering high risk individuals, if the insurer agrees to offer coverage in under-served markets.
  • Adding funding for state-based reforms that are intended to help cover out-of-pocket costs and opioid programs.
  • Placing an obligation on insurance companies to report months of creditable coverage for purposes of enforcing a six-month waiting period for individuals who fail to maintain continuous coverage.
  • Allowing insurance companies to offer plans that do not comply with many of the ACA mandates, as long as the insurer offers coverage in an Exchange that does satisfy all of the ACA requirements.

A number of provisions remain unchanged from the earlier version of the BCRA, including:

  • Repeal of the penalties on employers that fail to offer affordable, minimum value coverage to full-time employees.
  • Repeal of the penalties on individuals who do not have minimum essential coverage.
  • Repeal of the maximum salary reductions for health flexible spending accounts.
  • Enhancements to HSAs, including increasing the maximum contributions to HSAs, allowing reimbursement of expenses incurred up to 60 days before an HSA is established and allowing spouses to make catch-up contributions to an employee’s HSA. Penalties for non-qualified distributions would be reduced from 20 percent to 10 percent.
  • Repeal of all of the ACA’s taxes, except those mentioned above, with the exception of the so-called Cadillac tax, which would be delayed through 2025.
  • The requirement that an individual who has a break in coverage of 63 days or more have a six-month waiting period before new coverage can begin.
  • Allowing the establishment of association health plans for small businesses that would allow the plans to be treated as large group plans, exempting them from community rating and essential health benefits requirements.

The Congressional Budget Office is expected to release its analysis of the latest version of the legislation next week. After that, the Senate is likely to vote on whether or not to proceed to a debate. It is unclear whether there will be enough votes to advance the bill.

Reports indicate that Senators Rand Paul (R-KY) and Susan Collins (R-ME) intend to vote against allowing the bill to proceed. If all Democrats vote against allowing the bill to proceed, as is expected, all other Republicans would have to vote in favor of proceeding, which would allow Vice President Mike Pence to cast a tie-breaking vote to allow the bill to advance. If just one more Republican decides to vote against allowing the bill to proceed, it will die, at least for a while.

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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