WHAT INSPIRES YOU, INSPIRES US.
Insights : Article

Senate Republicans Release Draft of the Better Care Reconciliation Act of 2017

June 23, 2017

On Thursday, June 22, the Senate Committee on the Budget released a "discussion draft" of the
Better Care Reconciliation Act of 2017 (BCRA). The BCRA represents the Senate's initial version of the House passed American Health Care Act of 2017 (ACHA) that would repeal and replace provisions of the Affordable Care Act (ACA). Majority leader Mitch McConnell is hoping to have the Senate vote on this bill before the July 4 holiday.

The Senate Budget Committee's explanation of the BCRA provisions can be found here. The explanation also includes a link to the draft bill. 

A Long List of Variables
Expect changes to the draft bill; it is a "discussion draft." Repealing the ACA is not a done deal and could very well not happen at all, depending on amendments made as the BCRA is debated in the Senate. In addition, the Congressional Budget Office still needs to analyze the bill and issue its report on the bill's impacts. It's anticipated this "scoring" will be done within a week, and the results will likely drive more debate.

There has been a lot of pre-planning to structure the voting rules in the Senate to come under the budget reconciliation process, which enhances passage of the Senate's version of the bill. Under the budget reconciliation process, debate is limited, protecting the bill from filibuster, and 51 "yes" votes will be needed to pass the BCRA bill. Normal Senate rules require 60 "yes" votes to pass legislation. Currently there are 52 Republican Senators and 48 Democratic Senators; however, in the event of a 50/50 tie vote, Vice President Pence can cast the deciding vote.

But, gathering 51 "yes" votes to pass the BCRA bill creates a challenge for the Senate leadership and the Trump administration. Plus, since the Senate rewrote the ACHA as was anticipated, a conference committee will need to reconcile the differences between the House and Senate versions in a manner acceptable to majorities in both the House and Senate. This process will undoubtedly test the ability to hold the voting groups of both chambers of Congress together for a second time. 

Comparison of Plans to Repeal and Replace the ACA
Here is a comparison of some of the BCRA's key features with provisions in the AHCA.

Senate Version - BCRA

House Version - AHCA

Eliminates employer and individual mandates after 2015

 

Same

 

Repeals 3.8% net investment income tax after 2016 and .9% Medicare surtax after 2022

 

Same

Ends subsidies from Exchanges after 2019

Same

Repeals tanning tax for services after September 2017

 

Repeals tanning tax for services after June 2017

 

Repeals medical device tax after 2017

 

Repeals medical device tax after 2016

 

Provides premium tax credits through 2019 based on age, income and geography

Provides refundable tax credits through 2019 based on age rather than income

No monetary penalties for a break in coverage

Potential penalties for break in coverage

Permits states to seek waivers from essential health benefits requirements in order to offer so-called "skinny" health plans that may be more affordable

Similar - but would allow states to seek waivers permitting higher premiums for pre-existing conditions

Maintains requirement that children are allowed to stay on their parents' health insurance through age 26

Same

Reduces funding for Medicaid expansion after 2020 with phase-out provisions to delay impact on states and protect special needs children

Reduces funding for Medicaid expansion starting in 2020 and, like BCRA, allows states to require able-bodied individuals to work

Allows insurers to charge older individuals five times more than younger individuals for health coverage (compared to three times more under ACA)

Same except that the House bill starts with plan years beginning on or after January 1, 2018, which is one year earlier than the Senate bill.

Temporarily repeals tax on high-cost employer health coverage ("Cadillac" plans) for 2020 through 2025

Same

Flexible Spending Account (FSA) limits are repealed after 2017, Health Savings Account (HSA) increased tax is repealed after 2016, HSA contributions limits are increased after 2017.

Same except the House bill repeals FSA limits after 2016.


ACA Is the Law to Follow
Our advice to clients is unchanged: Keep following the current law until a new law is passed.

If you have questions on the ACA requirements or the pending health care repeal and replacement plans, please contact your local Eide Bailly LLP professional.