Over the past few days, the U.S Senate has released not one, but two iterations of the Better Care Reconciliation Act of 2017. Although the latest version only slightly amends the first by adding a six-month mandatory lockout provision for those with lapsed coverage, the proposal will likely remain a moving target as Senate Republicans jockey for the necessary votes. More amendments are forthcoming, but it’s important that we take stock of what’s worth keeping and what should be revisited in the negotiation process.
Chris Jacobs, health policy analyst and CEO of Juniper Research Group, has a put together a thorough vetting of the bill through a free market lens. However, a more succinct outline of some of the good, the bad, and the ugly thus far is included below. Though not necessarily comprehensive, this list highlights important aspects of the plan that will have some of the greatest impact, both positive and negative, at the state level.
The GOOD:
- Repeals many of the Obamacare taxes, including the unpopular Cadillac tax on high-cost health insurance plans and medical device taxes.
- Nullifies the employer coverage mandate and retroactively nullifies penalties for non-coverage dating back to December 31, 2015.
- Raises the contribution limits to Health Savings Accounts (HSAs).
- Reduces the enhanced federal match rate for the Medicaid expansion populations from 90% to 85% by 2021, 80% by 2022, and down to the pre-Obamacare rate of 75% by 2024.
- Restricts retroactive eligibility for individuals receiving Medicaid benefits from three months to one month beginning in October 2017, further discouraging individuals from jumping onto Medicaid simply when medical expenses arise without paying consistent premiums.
- Creates a Medicaid block grant program for the states.
- Encourages states to be innovative through the waiver process that implies some presumptive approval from Washington.
- The latest addition: includes a mandated six-month lockout period for individuals who let their coverage lapse before they are eligible to reapply for coverage.
The BAD:
- Permits Obamacare’s system of insurance subsidies to continue being administered through the tax code.
- Gives too much authority to Washington bureaucrats with respect to the creation of “stability funds” to insurance companies and jurisdiction over Medicaid programs.
The UGLY:
- Retains Obamacare Medicaid expansion dollars, though reduced over time, through 2024. Seven years is well beyond what is necessary for states to adjust their budget obligations and creates too long a window for Congress to renege.
- Fails to repeal any of Obamacare’s regulations upon insurance companies, which are largely responsible for driving up costs for consumers.
- Continues to place states at the mercy of the federal government with regards to the management of their own health insurance markets. The feds have cherry-picked elements of Obamacare for states to exempt through the waiver process, but effectively relegate states to seeking permission from Washington for the autonomy they should have in the first place.
- The Senate proposal maintains the subsidy cliffs within Obamacare that provide disincentives to work. Individuals still stand to lose thousands in benefits due to very slight increases in their income that make it illogical for them to earn more money.
We hope to see our Congressional leaders take stock of these concerns as they press forward on reform of President Obama’s broken healthcare scheme.