On July 13, Senate Republican leaders released an amended version of the Better Care Reconciliation Act of 2017 (“BCRA”). The BCRA was originally introduced on June 22. Majority leader Senator Mitch McConnell had hoped to bring the proposal to a vote before Congress’ July 4 recess, but opposition from a number of Republican Senators caused him to pull the bill prior to the recess for further negotiation. Senator McConnell has indicated he hopes to hold a vote on the amended BCRA as early as next week.
Overall, the bill closely resembles the original version, with a few notable changes intended to address some of the concerns voiced by the bill’s opponents. The key changes to the bill are highlighted below.
New Skinny Plan Option
The amended BCRA provides that insurers can offer so-called “skinny” plans in a rating area, so long as the insurer also offers at least one ACA-compliant gold plan (80% actuarial value), one silver plan (78% actuarial value) and one plan with a 58% actuarial value in the same rating area (which is the new benchmark for determining premium tax credits under the BHCA). Skinny plans would not be required to comply with certain ACA requirements, including, for example, the requirements regarding essential health benefits, actuarial value, out-of-pocket limits, guaranteed issue, preventive service coverage and prohibitions on health status underwriting. These requirements could only be waived, however, if state law permits such waivers.
Changes to Catastrophic Plans
The revised bill would expand the eligibility rules for “catastrophic” plans, allowing any individual to purchase catastrophic coverage beginning in 2019. Under the ACA, currently only individuals under age 30 or who cannot afford other coverage can buy catastrophic plans. The revised bill would also allow premium tax credits to be used to purchase catastrophic plans.
Health Savings Accounts
The amended proposal makes a few changes to HSAs beginning in 2018. First, individuals could use HSA funds to reimburse medical expenses for children under age 27. They could also use HSA funds to pay for individual high-deductible plan premiums in excess of any available premium tax credit. Finally, the amended proposal states that a high-deductible plan that provides coverage for abortions will generally be ineligible for an HSA.
Certain ACA Taxes Added Back
The July 13 version of the BCRA adds back some of the ACA taxes repealed under the original BCRA. These include the additional Medicare tax on high income wage earners, the net investment income tax, and the limit on deductions health insurers can take for executive compensation in excess of $500,000.
Association Health Plans
The BCRA’s association health plan provisions are modified under the revised bill. In general, the changes appear to remove the ability of states to regulate association health plans. The amended BCRA would also allow professional employer associations to sponsor association health plans.
Continuous Coverage Requirement
The BCRA imposes a six-month waiting period on individuals who have a lapse in creditable coverage of 63 or more consecutive days. The amended version provides that creditable coverage includes health care sharing ministries, and allows Health and Human Services to waive the continuous coverage requirement in other situations. In addition, the amended BCRA would require health insurers and health care sharing ministries to provide certification of periods of creditablecoverage requirements are met.
Abortion Coverage
Health plans that fail to adequately segregate funds used to pay for abortions (which cannot be federally funded) from other funds are subject to a $100 per individual per day penalty under the revised bill.
Substance Abuse Treatment and Research Funding
The amended bill provides $45 billion over an eight-year period to fund substance use disorder treatment and $250 million to fund opioid abuse research.
State Stability Funding
As revised, the BCRA appropriates $70 billion for state stability funds for insurers that cover a disproportionate share of high risk individuals and who agree to offer coverage in under-served markets.
It is still far from clear as to whether the revised BCRA will gain the support of the 50 Senate Republicans it needs to pass. While the changes might convince some conservative Republicans to support the bill, the revised proposal does not appear to address some concerns raised by more moderate Republicans. We will be monitoring activity in the Senate very closely in the coming days and will keep you informed of any significant developments.
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The materials and information contained in this content represent the opinions of Alltrust Insurance, Inc. and are for informational purposes only, not for the purpose of providing legal advice. The opinions expressed in this communication are made based on currently available information and are subject to change at any time. For advice about a specific legal question or situation in your organization, Alltrust Insurance, Inc. recommends you contact legal counsel of your choice.
