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Life Health > Health Insurance > Health Insurance

5 Things for Agents to Know About the Senate Health Bill

By Allison Bell

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The Senate’s new Better Care Reconciliation Act bill might fail, but it could still pass.

Republicans hold just 52 seats in the Senate. Senate Majority Leader Mitch McConnell is struggling to get more conservative and more moderate Republicans to unite behind the version of the Affordable Care Act change bill released Thursday. At press time, at least eight Republican senators were publicly expressing skepticism about the idea of voting for the bill.

(Related: Senate Republicans Unveil Health Care Plan)

In the past, however, backers of other health bills have faced similar problems with rounding up votes and triumphed.

In 2009 and 2010, when the Democrats were working on the bills that created the Affordable Care Act, they had trouble with getting the most liberal Democrats and the most moderate Democrats to vote for the same bill.

In May, when House Speaker Paul Ryan brought the House ACA change bill, the American Health Care Act bill, to the House floor, no one knew what would happen. House members ended up passing it by a 217-213 vote.

Sen. John Cornyn, R-Texas, told Bloomberg today that he’s confident the Better Care Reconciliation Act bill will attract enough Republican votes to get through the Senate.

The 142-page Better Care draft is written in a dense, confusing way, with many key provisions that would change the laws now in force by adding sentence fragments, deleting several words, or adding or deleting punctuation marks. The draft does not always explain what effect those changes are supposed to have.

Perhaps as a result, commentary on specific provisions in the draft has been scarce.

Here’s a look at five of the more focused reactions that came out yesterday and today.

1. Insurers have mixed feelings.

America’s Health Insurance Plans, a group for health insurers, is not taking an official position on the draft. It told Bloomberg that it likes the commercial insurance subsidies in the draft but has concerns about provisions that would phase in dramatic cuts in Medicaid funding.

The Blue Cross and Blue Shield Association is also praising the subsidy provisions, but it says the Senate needs to add strong incentives for people to keep themselves covered.

2. Experts think a state Affordable Care Act waiver program expansion program provision could be powerful.

The Patient Protection and Affordable Care, part of the ACA, already includes a Section 1332 waiver program provision. A state can use that provision to tinker with how its exchange program works, and with other ACA rules.

The Senate Better Care draft would let a state use Section 1332 to change many different ACA rules. The draft makes understanding which rules the draft could actually change difficult. The draft states that a state could ask to change the rules described in one paragraph in PPACA Section 1332. That paragraph in PPACA Section 1332 refers, in turn, to six major sections of PPACA. Some of those six sections may, in turn, refer to additional sections.

Joseph Antos and James C. Capretta of the American Enterprise Institute write in a blog on the website of Health Affairs, an academic journal, that they think a state could use a Better Care Section 1332 waiver to change its essential health benefits package, or standard benefits package, but not to bring back medical underwriting.

Radar (Image: Bram Janssens/Hemera)

(Image: Bram Janssens/Hemera)

Tracy Watts, a health policy specialist at Mercer, says in a commentary that she also thinks the waiver provision would let a state change its essential health benefits package. “We will take a deeper look into this issue and post about it next week,” Watts writes.

Any changes in the essential health benefits program could affect large group plans, including self-insured plans, as well as individual and small-group plans, because group plans must provide unlimited benefits for any essential health benefits that they do cover.

3. The Section 1332 waive program expansion could let states give insurers the ability to issue limited-benefit coverage.

Timothy Jost and Sara Rosenbaum write in another Health Affairs blog that the Better Care waiver program provision has a potential problem: It would let the U.S. Health and Human Services secretary approve or reject a waiver proposal based only on what the proposal would do to the cost or use of health coverage.

The provision “ignores both how comprehensive the coverage must be and how high cost-sharing may be under the waiver,” Jost and Rosenbaum write.

4. Fitch Ratings thinks the Better Care draft rules could be hard on insurers with large individual health or Medicaid operations.

The draft would provide more cash for individual commercial health insurance subsidies, but it would keep the current ban on medical underwriting, according to Fitch.

The subsidy money would help insurers, but keeping the ban on medical underwriting would limit insurers’ ability to manage risk, Fitch says.

Changes and reductions in federal Medicaid funding could hurt insurers, but that funding pressure could also help insurers, by pushing states to make more use of Medicaid programs managed by outside companies, Fitch says.

“Additionally, with such sweeping legislation, unintended and unforeseen consequences are likely to create uncertainty over the ultimate net effect on health insurers,” Fitch says.

5. The Better Care draft could wipe out bare-bones group health benefits.

Before the Affordable Care Act came along, some employers offered at least some workers limited-benefit health plans, or plans designed to provide anywhere from about $1,000 to $200,000 in health benefits.

The Affordable Care Act has eliminated traditional limited-benefit medical plans in the individual and small-group markets, but large groups can now offer bare-bones major medical plans that provide just enough coverage to meet the ACA employer “minimum essential coverage” offer requirements.

Compliance lawyers say in a commentary that the Better Care draft could wipe out the market for bare-bones minimum essential coverage products.

Elimination of the ACA employer mandate would end the pressure for employers to offer the products to avoid ACA penalties, the Lockton lawyers write.

Meanwhile, the Lockton lawyers write, making those minimum-value products available to workers could shut those workers out of any health insurance premium subsidy system that still exists, because, after 2019, the Better Care draft premium tax credit subsidy program would shut out any worker who had access to any employer-sponsored minimum essential coverage. 

— Check out 5 Peeks at the Senate’s Small-Group Health Proposal on ThinkAdvisor.

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