Senate Republicans Release Sweeping Legislation to Repeal and Replace ACA

Senate Republicans released draft legislation on June 23 to repeal and replace the Affordable Care Act that does much of the same that similar legislation from the House would do.

The aim of the draft is the same as the American Health Care Act (AHCA) passed by the House of Representatives in April. But soon after that bill was passed, the Senate leadership made sure that everyone knew that it would be putting together its own legislation instead of entertaining the AHCA.

Their bill, dubbed the Better Care Reconciliation Act of 2017, is sweeping in its complete disassembly of the ACA, particularly the employer and individual mandates, taxes attached to the law, and a reversal – and then some – from the Medicaid expansion that also took place under the ACA.

Here we try to boil it down to what will matter to you. The bill would:

• Instead of eliminating the employer mandate requiring organizations with 50 or more employees to secure coverage for their workers, eliminate the $2,400 a year per employee penalty.
• Instead of eliminating the individual mandate to have coverage, eliminate all penalties for not securing coverage.
• Repeal all ACA taxes except the “Cadillac tax,” which would levy a 40% tax on any employer-sponsored plans that cost more than a certain amount. The Cadillac tax would be pushed out to 2026.
• Offer tax credits to people buying coverage in the individual market and whose incomes are 350% of the federal poverty level. That’s compared with 400% of the poverty level under the ACA. Those tax credits would be based on age and income level.
• Bar employers from expensing health plans that cover abortions (except in cases of rape and incest).
• Nearly double contribution limits for health savings accounts.

• Let people use their HSAs to pay for over-the-counter medications, which is restricted under the ACA.
• Allow both spouses to make catch-up contributions to one HSA, beginning in 2018.
• Amend the Employee Retirement Income Security Act (ERISA) to create a small business “association health plan” option.

• Change age rating bands to 5-to-1 (or higher as determined by states). That means that health plans could charge elderly enrollees up to five times as much as younger enrollees, compared to three times as much under the ACA.
• Keep ACA rules such as barring discrimination for pre-existing conditions, no health underwriting and allowing children to stay on a parent’s plan through age 26.
• Allow states to get waivers if they want to change or reduce the number of essential benefits that all health plans are supposed to include under the ACA.
• ACA reporting requirements for companies would remain unchanged. The ACA requires all applicable large employers to file annual reports to the IRS documenting the health coverage they provide to each employee. Similar forms must also be supplied to employees.

At this juncture, the bill has an uphill climb as Senate GOP leader Mitch McConnell has to wrangle the votes necessary for it to pass – and he wants to bring it to a vote on the Senate floor before the end of June.

If it passes, it would be sent to the House, where it faces an uncertain future.