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An Overview of the Senate and House Health Reform Bills: The Better Care Reconciliation Act & American Health Care Act

As promised, the Senate has proposed its own health reform legislation and it is similar to the House’s version of the bill in many ways. It would reduce funding for Medicaid, eliminate taxes on medical device makers, insurance companies, and wealthy individuals, and eliminate coverage mandates for individuals and employers. However, it will keep more of the current Affordable Care Act (ACA) insurance regulations. While there are likely to be some updates before lawmakers vote, there are many proposed changes that will remain and significantly impact the healthcare system and consumers. Below is a comparison of the major provisions under the Republican (GOP) Senate and House bills and the ACA.

Uninsured Rate

The Congressional Budget Office (CBO) estimates nearly 22 million fewer people will be covered in over the next decade under the Senate’s plan, and 23 million fewer under the House’s plan. Low- to moderate- income Americans will be those most effected.

Medicaid Changes

Both Senate and House plans would lead to funding cuts, expansion would cease, and the funding structure would change.

ACA

-Federal & States share the cost.

-Federal funding depends on how much care the state’s Medicaid population receives.

-Federal picks-up most of the cost for expanding Medicaid coverage to lower-income adults with children in the states that have chosen to expand their programs.

Senate GOP

-Federal funding would be provided via a fixed per capita cap or block grant per year. The amount would increase annually by a percentage linked to inflation rate (the result would be lower than what is laid out in the House bill).

-Expansion funding Medicaid benefits would be phased-out beginning in 2020, ceasing entirely by 2024.

House GOP

-Federal funding would be provided via a fixed per capita cap or block grant per year, increased annually according to a percentage linked to inflation rate.

-Federal expansion funding would be eliminated by 2020.

Insurance Costs

After 2020, both the Senate and House plans would result in lower premiums for consumers via less comprehensive coverage options. The CBO projects that the lower premium options will have less coverage and higher out-of-pocket expenses.

ACA

-Subsidies are provided to individuals making less than $47,000 per year for purchasing insurance in the healthcare marketplaces.

-Subsidy amounts are linked to income and cost of insurance in the person’s area.

Senate GOP

-Subsidies would be limited to individuals at 350% the poverty level vs. 400% under the current plan.

-A new formula that would be used to calculate subsidies would cover the cost of less comprehensive health plans. Consumers would receive substantially less assistance than they current receive.

House GOP

-Subsidies would be provided to individuals making less than $75,000 per year.

-Subsidy amounts would be linked to age rather than income. Younger, low-income individuals would receive less assistance than they are currently receiving.

AGE

CREDIT

20-29

$2,000

30-39

$2,500

40-49

$3,000

50-59

$3,500

60+

$4,000

 

-Subsidies would not tie to the cost of insurance in the person’s area, so people in higher-cost areas would not get as much proportionally.

Insurance Mandate

ACA

-Individuals are required to purchase health insurance or pay a tax penalty.

-Employers with least 50 employees must provide health insurance to their employees who work more than 30 hours a week.

Senate GOP

-The tax penalty for individual and employers would be eliminated.

House GOP

-The tax penalty for individual and employers would be eliminated.

-There would be a six-month waiting period for those who went without insurance for more than 2 months.

Guaranteed Coverage

ACA

-Individuals can get coverage if they are sick. Insurers cannot deny coverage to individuals with pre-existing medical conditions.

-Insurers cannot charge sick consumers more for coverage.

-Insurers cannot impose annual or lifetime limits on coverage.

-Insurers must offer a basic set of benefits, including mental health, prescription drugs, and maternity care.

-Insurers cannot charge older consumers 3x more than younger consumers.

Senate GOP

-States would be allowed to seek a waiver from several consumer protections—whereby eliminating some coverage requirements.

-States would be allowed to scale back on which conditions they require insurers to cover. The structure of this part of the law would also allow insurers to re-impose annual and lifetime limits on some types of coverage. Those with pre-existing conditions waived in their state may not be able to buy plans that cover all of their treatments and care.

-Insurers could charge older consumers 5x more than younger consumers. This will increase premiums for those in their 50s and 60s, and lower them for younger individuals.

House GOP

-States would be allowed to seek a waiver from several consumer protections- whereby eliminating some coverage requirements.

-State would be allowed to scale back on which conditions they require insurers to cover. The structure of this part of the law would also allow insurers to re-impose annual and lifetime limits on some types of coverage. Those with pre-existing conditions waived in their state may not be able to buy plans that cover all of their treatments and care.

-State could allow insurers to charge sick people more. This could potentially make coverage unaffordable for some.

-Insurers could charge older consumers 5x more than younger consumers. This will increase premiums for those in their 50s and 60s, and lower them for younger individuals.

Insurance Marketplaces

ACA

-People who don’t get health insurance through their work can compare plans.

-All plans on marketplaces must offer a basic set of coverage, such as hospital care, mental health services, and prescription drugs.

GOP (both Senate & House)

-It’s unclear how the marketplaces would work because the insurance companies would potentially offer health plans that do not offer the same set of benefits.

Women’s Health

New GOP plans would impose new restrictions on health plans with abortion coverage. Planned Parenthood would be defunded for medical services provided to Medicaid recipients.

ACA

-Insurers cannot charge women more than men for the same health plan.

-Insurers are required to provide a basic set of benefits, which include maternity care and contraception.

-Planned Parenthood receives federal funding for medical services used by Medicaid recipients. Abortion cannot be funded with federal dollars.

GOP (both Senate & House)

-Insurers still wouldn’t be able to charge women more than men for the same health plan.

-States could seek waivers to drop some basic benefits, such as maternity care and contraceptives.

-Medicaid would no longer be required to offer these basic benefits, which would have a significant impact on lower-income women.

- Nearly 80% of Planned Parenthood’s patients have income at or below 150% the poverty level, which means this provision would significantly affect low-income women.

-Medicaid could not provide finding for any health clinics that provide abortion services, including Planned Parenthood.

Federal Deficit

The GBO found that by 2026 the Senate version of the bill would cut the federal deficit by $321 billion and the House version would cut the federal deficit by $118.7 billion. The savings would largely be generated by cutting Medicaid funding and reducing the subsidies that help people pay for insurance.

Taxes

The taxes under the ACA pay for subsidizing insurance. The Senate and House bills would eliminate these taxes and do not include any new taxes to offset this loss in revenue.

ACA

-Insurance companies and medical device maker that benefit from new customers pay more taxes. Tax payers with incomes over $250,000 are taxed more.

GOP (both Senate & House)

-Taxes on insurance companies, medical device makers, and wealthy Americans would be eliminated. These tax cuts would total $663 billion over the next decade.

-The Cadillac Tax would be delayed to 2026 instead of 2020.

Tax-Advantage Savings Accounts

The proposed plans would result in the raise or elimination of limits on tax-advantage savings accounts. This would especially benefit high-income individuals who are able to set aside large ­­­funds.

ACA

-Individuals can set aside up to $3,400 and families up to $6,750 tax free in a health savings account (HSA).

-Contributions to tax-deductible flexible spending accounts are capped at $2,600 for employed individuals and $5,200 for 2-earner couples.

GOP (both Senate & House)

-HSA limits would be set to the annual out-of-pocket maximum for high-deductible plans. In 2018, individuals would be able to save $6,650 and $13,300 for families.

-Contributions to tax-deductible flexible spending accounts would have no caps.

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About the Author

Marketing Analyst

Lauren is a digital marketing and communications strategist, copywriter, and all-around marketer. She focuses on leveraging opportunities to engage and inform Health Dialog’s audience about product innovation and healthcare industry news. Lauren collaborates with the company’s thought leaders to develop marketing campaigns and content for the company’s website, blog, social media, white papers, webinars, and event presentations. She is especially interested in sharing ways to improve individual healthcare experiences and the effectiveness of health management programs.

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