The new version of the Senate’s Affordable Care Act change bill could strip many federal rules from the off-exchange individual major medical market, and nudge the public health insurance system to focus on serving people with health problems.
The Senate Budget Committee posted a copy of the Better Care Reconciliation Act bill update today on its website. A copy of the bill is available here.
Most of the new version of the bill is similar to the version Senate leaders posted on June 22.
(Related: Senate Republicans Unveil Health Care Plan)
Some of the major changes include:
Extra cash for Alaska.
Retention of at least three Affordable Care Act taxes.
Addition of a federal oversight system for multi-state small business association health plans.
Tougher continuous coverage ownership requirements for people who want to buy major medical coverage.
An off-exchange health plan proposal, championed by Sen. Ted Cruz, R-Texas, that could lead to a dramatic split between the on-exchange and off-exchange individual major medical markets.
Like other bills that have received significant national media coverage in recent months, the bill would simply change some parts of the Affordable Care Act. The bill would not repeal either the Patient Protection and Affordable Care Act of 2010, or any of the health-related provisions of the Health Care and Education Reconciliation Act of 2010. The bill would leave many sections of the Affordable Care Act unchanged.
The future of the new version of the bill is uncertain. Most of it is similar to the version released in June. Supporters had trouble attracting enough Republican votes in the Senate to pass that version of the bill.
Here’s a look at some of the differences between the new version of the Better Care bill and the old version. We’ve used bill section numbers to show where you to look for yourself in most cases, but we’ve used PDF page numbers in cases in which the section numbering seems confusing.
Bill drafters have kept Section 106. That section would provide $132 billion for calendar years 2019 through 2026 to promote stability and innovation in the commercial health insurance market.
Section 106 would change Section 2105 of the Social Security Act to create new short-term and long-term stability and innovation funds.
On page 13 of the PDF of the new draft, the revisers have added a provision describing how the Centers for Medicare and Medicaid Services should distribute the long-term stability and innovation cash. The provision calls for the CMS administrator to use 1% of the $133 billion in long-term stability cash to support “health insurance issuers in states where the cost of insurance premiums are at least 75% higher than the national average.”
Sen. Lisa Murkowski, R-Alaska (Photo: Murkowski)
Alaska appears to be the only states where health insurance premiums are at least 75% higher than the national average.
Sen. Lisa Murkowski, R-Alaska, has been one of the Senate moderates expressing reservations about colleagues’ efforts to change the Affordable Care Act. In the past, she has suggested that she would not vote for an Affordable Care Act change bill simply because it provided extra money for Alaska. She has not yet commented on the new version of the Senate bill.
2. Tax Retention
Traditional Senate rules make changing Affordable Care Act tax, penalty and spending provisions much easier than changing other provisions.
Many Republican lawmakers would like to at least eliminate all Affordable Care Act taxes and penalties.
The earlier version of the Better Care bill would at least temporarily eliminate all Affordable Care Act taxes and penalties. For procedural reasons, the bill would eventually bring the “Cadillac plan tax,” the Affordable Care Act tax on high-cost health benefits packages, back.
The new version of the bill would keep three Affordable Care Act tax provisions.
The 0.9% Medicare surtax.
The 3.8% net investment income tax.
The $500,000 annual cap on the deductibility of health insurance company executive, officer and director compensation.
In the earlier version of the bill, Section 117 would have eliminated the Medicare surtax, Section 119 would have eliminated the net investment income tax, and Section 120 would have eliminated the health insurance company executive compensation provision.
3. New Multi-State Association Health Plan Oversight
The old version of the Better Care bill included a provision creating new multi-state small employer association health plans. The plans would be domiciled in just one state, but the old version of the bill did not say much about how the plans would be regulated.