U.S. Senate Unveils Health Care Bill Designed to Dismantle the ACA
Jennifer Oliva 29th June 2017

On May 4, 2017, the United States House of Representatives voted in favor of the American Health Care Act of 2017 (“AHCA”) in an effort to repeal and replace the Affordable Care Act (“ACA” or “Obamacare”).  According to the Congressional Budget Office (“CBO”), the AHCA will result in the loss of health care insurance for 23 million Americans and a reduction of $119 billion to the federal deficit by 2026.  The overwhelming majority of the projected deficit savings derive from the AHCA’s $834 billion in cuts to Medicaid, the federal-state health care program which serves low-income and disabled Americans. The AHCA also calls for $276 billion in reductions for subsidies for individual health insurance but those reductions and the dramatic Medicaid cuts are largely offset by the bill’s tax cuts that benefit the highest-income Americans.

The AHCA also could make it prohibitively expensive for certain vulnerable Americans, including women, the sick, the rural poor, and the elderly, to obtain health care coverage. This is because the House bill eliminates the ACA requirement that insurers cover “essential health benefits,” such as emergency services, birth control, prenatal and maternity care, mental health treatment and prescription drugs.  It also permits states to waive the ACA’s pre-existing conditions protections by permitting them to establish high-risk pools that allow insurers to set premiums based on health status. Unsurprisingly, the AHCA has proven incredibly unpopular with Americans.

On June 22, 2017, the United States Senate unveiled the Better Care Reconciliation Act of 2017 (“BCRA”), a 142-page bill aimed at dismantling the ACA. Prior to its release, the proposed legislation was widely criticized because—and in dramatic contrast to the ACA—it was drafted in total secrecy by a small contingent of Senate Republicans.  Although the BCRA would not repeal the ACA reforms as quickly as the AHCA, both would result in a significant decrease in insured Americans.

The BCRA effectively maintains the structure of the AHCA “with modest adjustments.” The House and Senate bills each eliminate the ACA’s individual and employer mandates, essential health benefits requirements and most of its protections for individuals with pre-existing conditions. Each also makes deep cuts to Medicaid, permit insurers to charge older people five times as much as younger ones, and provide a significant tax increase for the wealthiest Americans. Much like the AHCA, the BCRA “asks low-and-middle income Americans to spend significantly more for less coverage.”

The most significant differences between the BCRA and the AHCA are their treatment of  Medicaid program funding. The BCRA phases in cuts to Medicaid more gradually than the AHCA.  While the AHCA eliminates federal Medicaid expansion funding immediately, the BCRA phases out that funding beginning in 2021 over a three-year period. The BCRA, however, makes more dramatic cuts in federal Medicaid funding to the states than the AHCA starting in 2025 by basing the amount of money to which a state is entitled on standard inflation rather than medical inflation.

The CBO released its analysis of the BRCA on June 26, 2017, confirming that the legislation would result in the increase in the number of uninsured Americans by 22 million by 2026 relative to the number of people insured under the ACA while reducing the net deficit by $321 billion over same time period.  The CBO further determined that a replacement of the ACA with the BRCA would result in older Americans paying much higher premiums.

In closing, it is worth noting that the BCRA likely faces more formidable challenges in the Senate than its AHCA counterpart confronted in the House.  Like the ACA, the BCRA will be subject to a process known as reconciliation, which allows tax, spending, and debt limit adjustment legislation to be enacted by a simple majority of the Senate without filibuster.  Assuming all Democrats oppose the BCRA, at least fifty of the fifty-two Senate Republicans and Vice President Mike Pence must support the bill in order for it to pass.

Concomitant with the release of the BCRA, four conservative Republican Senators, Rand Paul, Ted Cruz, Ron Johnson and Mike Lee announced that they were opposed to the current version of the legislation because it does not go far enough in repealing the ACA.  And since the release of the CBO analysis, at least two moderate Republican senators, Susan Collins of Maine and Dean Heller of Nevada, have declared that they are opposed to even debating the Senate bill given its substantial negative impact on the American uninsured rate.  Finally, West Virginia’s Republican Senator, Shelley Moore Capito, released a statement indicating that she “will review the draft legislation . . . to evaluate whether it provides access to affordable health care for West Virginians, including those on the Medicaid expansion and those struggling with drug addiction.”  As one of the biggest winners under the ACA in terms of per capita health care coverage and federal funding for Medicaid expansion, the CBO’s analysis makes clear that West Virginia, which suffers tremendous poverty and the highest opioid overdose rate in the nation, will be one of the biggest losers under the BCRA. Other predominantly rural states, like Alaska, likely face the same fact. Accordingly, commentators suspect that Senator Capito and Alaska Senator Lisa Murkowski may break ranks with their party and vote against the bill.

Author profile

Jennifer Oliva is Associate Professor of Law and Public Health at West Virginia University. She earned her masters degree in business administration at Balliol College, Oxford University, while studying as a Rhodes Scholar.

Citations

Jennifer Oliva, “U.S. Senate Unveils Health Care Bill Designed to Dismantle the ACA” (OxHRH Blog, 29 June 2017) <http://ohrh.law.ox.ac.uk/u-s-senate-unveils-health-care-bill-designed-to-dismantle-the-aca> [Date of Access]

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