ACA Road to Repeal: The Senate Revises the Better Care Reconciliation Act (BCRA)
***** UPDATED: July 21, 2017 ****
On July 13, 2017, the Senate released its revisions to its health care bill — the Better Care Reconciliation Act (BCRA). Additional changes were made to the bill after the original legislation was met with opposition within the Republican party. Given the lack of support, Senate Leadership decided not to hold a vote on the original legislation given the likelihood of the bill not passing.
Because of this opposition, Senate Majority Leader Mitch McConnell — in the last week of June — pushed the vote until after the July 4th recess to make changes to the bill. In this attempt to mend fences within the party after failed support, and after the Congressional Budget Office (CBO) score reported that 22 million people would lose insurance in the next decade, Republican leaders went back to the drafting table to add compromise language to their bill.
McConnell stated that the revised bill "was made 'stronger' in recent weeks with its revisions." Announcing a delay on July 11th of the August recess by two weeks, McConnell has made it clear that he is focused on bringing closure to legislative business, including the health care bill.
Although the new CBO score and the timing of the vote remain uncertain, here's what is known today, and what employers need to look for next.
Highlights of the Updated BCRA
- Appropriates around an additional $70 billion to the $112 billion in the original bill to encourage state based reforms.
- Individuals can use HSAs to pay for a certain portion of their high deductible health plan premiums.
- Individuals can use HSAs to pay for medical expenses of children who have not attained the age of 27 before the end of the year (the ACA did not include this change for HSAs like it did for group health plans).
- A high deductible health plan is not HSA-compatible if it includes coverage for abortions (with certain exceptions).
- Dedicates an additional sum of around $45 billion to substance abuse treatment and recovery, targeted at the opioid crisis, as well as over $50 million per year from 2018 through 2022 for related research.
- Individuals who meet certain requirements can use premium tax credits to purchase catastrophic plans.
- Retains the BCRA's repeal of most ACA taxes except for the investment income tax, the additional Medicare tax, and the limitation on the deduction for excessive remuneration paid by certain health insurance companies.
- From 2020 through 2023, States can apply for Medicaid funding for the purpose of continuing or improving home and community-based services for the aged, blind, or disabled.
- From 2020 through 2024, States can exceed the Medicaid per capita cap or block grants amount in cases of emergency.
- States that expanded Medicaid can add the expansion population under a block grant.
- Issuers that provide exchange-eligible coverage and meet certain other requirements may also offer coverage off the exchange that is exempt from certain ACA mandates.
- Creates a fund to aid health insurance issuers in covering high risk individuals enrolled through an exchange.
- An issuer in the individual market must impose a 6-month waiting period on: (1) any individual who enrolls in coverage during an open enrollment period and does not have 12 continuous months of creditable coverage; and (2) any individual who enrolls in coverage during a special enrollment period and does not have (a) 12 months of continuous coverage or (b) at least 1 day of coverage during the 60-day period before the date he/she applies for coverage. (The BCRA had the 12-month rule, but not the 1 day/60-day period rule for special enrollment enrollees.)
The Senate will now turn to debating these changes. There will no doubt be further amendments during these negotiations, and passage remains uncertain. As there are 52 Republican Senators, the reconciliation bill needs only a simple majority to pass — meaning 50. The GOP can only afford two members of their party to oppose the bill, with Vice President Mike Pence serving as the tie-breaker. No Democrats are expected to vote in favor of the Republicans' bill.
Even with the release of the revised BCRA, some consternation from Republican Senators has already surfaced, with both Senators Susan Collins (R-ME) and Rand Paul (R-KY) opposing the revised bill as drafted. With just two Senators opposed, VP Pence could be the tie-breaker on the health care bill, but if a third Senator defects between now and the vote, the bill will fail. If the bill passes, it will go back to the House for adoption, or for further discussion to reconcile it with its version of the health care bill, the American Health Care Act (AHCA), before heading to the President's desk for approval.
Guidance for Employers
As the news seems to change daily with respect to the health care bill's status, employers must remember that the Affordable Care Act (ACA) is still the law, and must therefore continue all ACA-related compliance activities. Although some level of change appears probable, it will take time. Even if new legislation is signed into law, effective dates may be set out a year or two, giving everyone time to transition. However, until the bill is officially signed by the President, the ACA remains the law and must be implemented as such.
Follow our "Road to Repeal" series, as we report on this proposed legislation's path through the Senate vote — whether this week or in coming weeks depending on the Senate's timeline.
The Senate continues to work on ACA repeal. Senate Republican leaders have issued several drafts of the BCRA. On July 21, 2017, they proposed an amendment to the previously passed House bill (H.R. 1628) that would repeal parts of the ACA beginning in 2020. The proposal is called the "Obamacare Repeal Reconciliation Act" and would repeal the ACA's taxes, subsidies, mandate penalties, and Medicaid expansion, but not the ACA's insurance regulations. The proposal is similar to a previous reconciliation bill which President Obama vetoed on January 8, 2016. A vote may be scheduled as early as next week. ADP continues to closely monitor.
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Other articles in this series:
ACA Road to Repeal: Better Care Reconciliation Act of 2017
ACA Road to Repeal: The AHCA Passes the House — What It Means for Employers Now
ACA Road to Repeal: Zombies vs. Vampires
ACA Road to Repeal: American Health Care Act
ACA Road to Repeal: What Does Repeal and Replace Really Mean?
ACA Road to Repeal: Compliance in a Shifting Regulatory Landscape
ACA Road to Repeal: Executive Order
ACA Road to Repeal: If the ACA Is on Its Way Out, What Comes Next?
ACA Road to Repeal: Will High-Risk Pools Return?
ACA Road to Repeal: A State-Based Approach to ACA Replacement