Decoded: The Better Care Reconciliation Act - aka the Senate version of the American Healthcare Act

Ah, the bill is finally out! The title: The Better Care Reconciliation Act. GOP can't lose more than three senators if they want this bill to pass, and right now they have way more than three senators who are not so hot about this bill. To help you understand this new bill and how it is "different" from the House version, I took the liberty of reading all 142 pages of it and other sites to help me best convey this piece of information to you. 

As for the timeline, the CBO has taken the bill and will be grading it and presenting its review sometime next week. In addition, Senate Majority Leader Mitch McConnell may or may not be meeting with those Republicans who are iffy about the bill so that they can get it to pass. All of this is supposed to be done by the July 4th recess, which starts on July 3rd and lasts till July 7th. Yup, that gives the Senate a week to get everybody on board so that they can pass it. 

So off to decoding and understanding this bill we go. I went in order of the bill and highlighting the most important aspects of it. 

Sec. 102 - eligibility of tax credit

The ACA had given tax credits to those living below 400 percent of the federal poverty line. This bill lowers the percentage to only 350 percent of the federal poverty line. Side note: the federal poverty line is a contentious issue because people disagree what that amount should be. Living in New York vs. living in Missouri are two very different lifestyles. Anyways, that means fewer people would be helped to afford healthcare. 350 percent of the federal poverty line: $41,580 for individuals and $85,050 for a family of four. 

In addition, for people who are low income, the act expects them to kick in more into their insurance plans. So the act doesn't help low-income people as much as the ACA does. For example, according to the chart in the act, a 55-year-old woman who makes 275% of the federal poverty line would have to kick in 10.5% of her income into her health insurance. Under the ACA, the same woman would only have to kick in 8.21% in. 

Sec. 104 - the individual mandate

All you need to know about this section is that it is gone. Byeeee individual mandate. Republicans hated this and now they have crossed it from the list. That means that healthy people might not continue to have health insurance because they won't be penalized for it --> so sick people might be the only ones with insurance. This bill replaces the mandate with no alternative though. 

Sec. 106 - state stability and innovation program

This program was created to help those that were hurt by Obamacare. This section is divided into short-term assistance and long-term assistance. You don't need to know the specific amounts but just know that the government is giving money to the Center of Medicaid and Medicare Services (CMS) to help high-risk individuals afford premiums and other services. States will have to submit an application to the Administrator of the CMS to get money to help the people in their state. Eventually, the money given to this program decreases as the years pass on because it assumes that people are more well adjusted. 

Sec. 108 - 119 - repeal of taxes/limitations

Some noteworthy ones listed in that section: 

  1. Repeal of taxes on employee health insurance premiums and health plan benefit
  2. Repeal of taxes on over-the-counter medications and prescribed medications
  3. Repeal of taxes on health savings accounts
  4. Repeal of medical device excise tax
  5. Repeal of health insurance tax
  6. Repeal of tanning tax

Sec. 121 - increasing amount put into Health Savings Account (HSA)

People can now put more money into their HSA. How much? The amount increased to the amount of their deductible and out-of-pocket limitations. So a lot of money. People like it because that money they deposit is not subject to the federal income tax. 

Sec. 126/127/128 - Medicaid

Ah the section that everybody is wondering about.

 Right now the government pays 95 percent of all costs for those in Medicaid. This bill decreases the amount that the government would be paying. By 2023, it would only be responsible for 75 percent of the costs, which is essentially cutting the Medicaid expansion program. Not a very good deal for states because they are responsible for more costs, so some may decide to leave the program.

Section 127 and 128 cover the funding aspect of Medicaid. The program is moving towards a "per capita" system where the government decides how much to give to the state for each enrollee. The problem is that the lump sum that is given to state does not take into account rising healthcare costs. For example, in the year 2020, $20,000 may not cover the same amount of treatment as it did in the year 2018.

 Sec. 1903B - Medicaid flexibility program

The Medicaid flexibility program is a phrase to denote each state's flexibility to design their own healthcare programs to meet their needs.

The reason I put this section in this article is that under this section the program includes mental health and substance abuse coverage. I think that this is a great addition because we currently do not have much legislation going on that addresses mental health issues and/or substance abuse, especially with the ongoing heroin/opioid epidemic.

But if there is anything you should now is that this bill hurts lower-class and middle-class Americans. If you have been following this post, then you know that there are two major cuts. One is that the people eligible for tax credits to pay for the insurance have decreased dramatically. The second is the cutting of Medicaid expansion funding. Remember, Medicaid is to help individuals afford healthcare. But this bill does prevent insurance companies from charging a higher price for those with preexisting conditions. 

We'll see what the CBO comes out with next week after they do their estimating and math. 

And that is it. The big takeaway from the Better Care Reconciliation Act. I only highlighted the sections I thought were important but below I have linked the two resources I used to write this post. 

CNN: http://www.cnn.com/2017/06/22/politics/republican-health-care-bill-text/index.html

Vox: https://www.vox.com/policy-and-politics/2017/6/22/15846728/senate-plan-better-care-reconciliation-act