On Thursday, Senate leadership released H.R. 1628, The Better Care Reconciliation Act of 2017.
Like the House-passed American Health Care Act, this bill was developed with no public hearings and no input from health and human services leaders. Unfortunately, the Senate bill closely mirrors the House-passed measure. Read lowlights of the Senate-passed measure.
- The bill fundamentally alters the Medicaid program by changing the federal financing formula from an entitlement to a capped program in 2020, a mere three years away. States are given the option to receive up-funding in a form of a block grant, in other words a cash advance from the federal government to carry out the functions of the program. The per capita cap model would impose a set dollar amount per beneficiary. However, analysis by several organizations show that the Senate formula would result in an underfunding of the Medicaid program, forcing states to cut back on either enrollment or benefits, or other priorities, like education, to fund the loss of federal dollars. States would take a much bigger hit in 2025 since the Senate bill pegs the formula to inflation, which does not keep up with medical costs.
- The bill phases out the federal funding for states that took up the option to expand their Medicaid programs over a three-year period, beginning in 2021. Thirty-one states, plus the District of Columbia, took up the federal option. However, if this bill becomes law, eight states would immediately shut down their expansion given their state laws. These states are: Arkansas, Illinois, Indiana, Montana, Michigan, New Hampshire, New Mexico and Washington.
- The bill adds work requirements for non-disabled, non-elderly, non-pregnant adults beginning Oct. 1, 2017. However, there are not investments for comprehensive workforce supports in the Senate bill. Given the proposed Trump and House of Representative budgets, programs that offer workforce supports would also see a significant reduction and cost-shift to states.
Private Market Changes:
- The bill allows states to define “essential benefit” requirement. Under current law, the federal government requires every health plan to cover a set of benefits, which includes maternity care, mental health and substance abuse disorder services, preventive and wellness services, and pediatric services. The Senate bill would allow states to opt out of this requirement through a waiver process.
- Federal subsidies to offset the cost of private insurance coverage would be offered to those earning under 350 percent of the federal poverty level, which is approximately $71,000 for a family of three. Current law permits those earning less than 400 percent to receive a federal subsidy, which is $81,680 for a family of three.
- The bill repeals the tax on corporations and wealthy Americans that funds the subsidies.
- The bill allows insurers to charge older Americans more than younger Americans.
- The bill eliminates the Prevention and Public Health Fund beginning next fiscal year.
- By giving states flexibility to define “essential benefits,” states could eliminate coverage for preventive health services
Looking for good news? The Senate bill would allow dependents to stayed covered under their parent’s plan through the age of 26.
As of today, Senate Majority Leader Mitch McConnell still plans to hold a vote next week. Join our “Action-a-Day” campaign. Designate one person on your staff to be responsible for implementing the daily action. Take 30 seconds NOW to email the Alliance Office of Public Policy and Mobilization your person’s contact information. We will email him or her daily with the specific action. Actions will take no more than two minutes to execute.
The Alliance opposes the current Senate proposal and has released a statement on the bill. An excerpt from the statement:
"The nonprofit, social services sector, which is uniquely positioned at the intersection of families, communities, and the systems they rely on, believes there are essential elements needed to improve and reform our health care system. If we are to truly reform the system and bend the cost curve, we must provide health care consumers access to a minimum floor of essential benefits and preventative care, regardless of the state they live in. We must fulfill our nation’s promise to better integrate behavioral health and primary care. The health care system needs to factor in the social and economic factors, which are the biggest predictors of health. Health system reform must be designed to address disparities and integrated to ensure better health outcomes.
We believe there is a better approach to reforming our health care system—one that ensures gains, not losses for those who rely on Medicaid and one that provides adequate and timely payment to providers of vital behavioral and health care services."
Read the full statement from Alliance President and CEO Susan Dreyfus.
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