Health Law Daily Dual bills duel in the Senate; CBO says both take insurance from millions
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Thursday, July 20, 2017

Dual bills duel in the Senate; CBO says both take insurance from millions

By Kathryn S. Beard, J.D.

Two Senate bills—an updated version of the Better Care Reconciliation Act of 2017 (BCRA) and one modeled after 2015 legislation—were released by Senate committees and analyzed by the Congressional Budget Office (CBO). Discussions on the bills are continuing, despite Senate Majority Leader Mitch McConnell (R-Ky) announcing the end of BCRA earlier this week and a majority of Senators revealing their plans to oppose the 2015 legislation. According to the CBO, the Obamacare Repeal Reconciliation Act of 2017 (ORRA) would cause 17 million Americans to lose health coverage in 2018. By 2026, 32 million individuals, compared with current law, would be uninsured and health insurance premiums would double relative to projections under current law. The changes to BCRA do not change the CBO’s projections for health insurance premium increases or decreases in the number of insured people (CBO Report, July 19, 2017; CBO Report, July 20, 2017).

Dual health reform bills. In May, the House of Representatives passed H.R. 1628, the American Health Care Act (AHCA), before the CBO could analyze the impact of the legislation (see The AHCA strikes back, May 4, 2017). Once the agency had time to complete its analysis, it determined that the AHCA would result in higher premiums and 23 million additional uninsured people (see AHCA amendments won’t save coverage for 23M or lower premiums for unhealthy Americans, May 25, 2017). When the Senate began work on H.R. 1628, it released its own version of legislation titled the Better Care Reconciliation Act of 2017 (BCRA) (see Senate Republicans release discussion draft of ‘Better Care’ health bill, June 22, 2017). On June 26 the CBO found that the legislation would cause 22 million would lose health insurance (see BCRA would curb Medicaid spending growth, increase uninsured numbers, June 30, 2017).

Earlier this week, a proposed amendment to BCRA failed to receive enough support within the Senate to proceed, and McConnell announced his intention to remove BCRA from consideration (see BCRA may be gone, but AHCA, ACA repeal efforts continue, July 18, 2017). He said that the Senate would instead proceed with AHCA, and amend that legislation with a substitute bill, ORRA, that the 114th Congress passed in 2015 but was vetoed by President Obama (see Bill to repeal portions of the ACA heads to the President’s desk, Obama veto imminent, January 13, 2016; Message in a veto: President says ACA stays put, January 13, 2016); a majority of Senators immediately announced their opposition to proceeding with ORRA. Despite opposition, both BCRA and ORRA received updated draft bills and CBO scores in the last 24 hours.

ORRA. ORRA, which is drafted as substitute text for H.R. 1628, consists of a large portion of the 2015 legislation. Title I of the 2015 legislation is not part of ORRA, while Title II is replicated as Title I of ORRA. ORRA would repeal many portions of the ACA, including:

  • premium tax credits and cost-sharing subsidies;
  • individual mandate;
  • employer mandate;
  • Medicaid expansion; and
  • taxes on medical devices, tanning, and net investment income.

The CBO’s analysis of ORRA shows that, compared with current law, 17 million additional people would lose insurance in 2018; 10 million more would lose insurance in 2020, when ORRA ends Medicaid expansion and marketplace subsidies; and in total, 32 million fewer people would have insurance in 2026. When it analyzed the 2015 bill, the CBO found that 22 million people would lose health insurance (see Senate’s ACA repeal would reduce deficits by $474B, December 16, 2015); the increase is due to later effective dates and use of a more recent baseline. The CBO noted that many market regulations on health insurance would remain in effect if ORRA became law, but next year, premiums in the nongroup market would increase as insurer participation would decrease. The market would destabilize, and average premiums would be 50 percent higher than current projections in 2020. ORRA would decrease federal deficits by $473 billion over 10 years, mostly due to repealing Medicaid expansion.

BCRA. The newest version of BCRA, posted by the Senate Budget Committee, does not include a much-discussed amendment from Sen. Ted Cruz (R-Texas). Most changes from the June 26 version are minor, changing language or altering the path to a definition, and none make a significant difference in the number of individuals the CBO projects to have health coverage or in the projected impact on health insurance premiums. The new version, however, does not include the repeal of two ACA taxes—the tax on net investment income and the Hospital Insurance payroll tax rate increase. It would also increase spending through the State Stability and Innovation Program. As a result, the CBO projects that the updated version of BCRA would reduce the federal deficit by $420 billion over 10 years, mostly due to changes in Medicaid funding and the continued income from the two taxes not repealed. It would have a larger impact on the deficit than the first version of the bill.

The CBO also noted, on page 8 of its analysis, that under its projections, BCRA may cause some health insurance plans to not comply with the law. Its example estimated that a single policyholder purchasing a benchmark plan with an actuarial value of 58 percent in 2026 would face a combined deductible for medical and drug expenses of $13,000. That deductible, however, would violate the legal limit on out-of-pocket spending, which the CBO projects to be $10,900 in 2026. Therefore, the CBO wrote, such a plan "would not comply with the law unless the formula used to calculate the limit was adjusted."

What’s next? The future of both bills remains in question. Fifty Senators will have to agree to a motion to proceed on H.R. 1628 before any amendments can be offered, and both versions are designated as amendments in the nature of a substitute. Most recently, enough Senators had announced their plans to vote against a motion to proceed to block consideration of either amendment. Sen. John McCain (R-Ariz), who was expected to vote in favor of proceeding to debate, is indefinitely absent from the Senate due to the discovery of a glioblastoma tumor. Without McCain, a 50-50 vote tie, broken by Vice President Mike Pence, is impossible. Therefore, if two Republican Senators vote against a bill, along with all Democratic and Independent Senators, the bill will fail. A vote may come as early as next week, while meetings continue.

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