Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.


Discussion Draft of Senate Health Care Bill Released

Majority Leader Mitch McConnell (R-Ky.) released a discussion draft of the Senate GOP’s health care bill last week titled the “Better Care Reconciliation Act of 2017.” The bill could move to the floor once the Congressional Budget Office (CBO) completes its analysis. The CBO says that it aims to provide a score of the bill early this week.

Hart Health Strategies Inc. prepared a side by side comparison of the Housepassed American Health Care Act (AHCA) and the draft Senate bill (Appendix A). The bill would provide $50 billion over four years to stabilize the insurance market. This funding would be in addition to cost-sharing subsidy payments, which would be extended through 2019. It also includes $62 billion over eight years for a state innovation fund, which could be used for coverage of high-risk patients, reinsurance, or other similar purposes. The bill would retroactively eliminate the individual and employer mandates to 2016. It repeals taxes on health insurers, medical devices, prescription drugs, and indoor tanning. It also eliminates the Affordable Care Act’s (ACA) investment income tax and the Medicare surtax. The Cadillac tax on high cost health plans would be delayed from 2020 to 2026. Unlike the House-passed AHCA, the bill does not contain the 30% surcharge for lack of continuous coverage. Like the House bill, the Senate bill includes a provision to give states the flexibility to alter their health markets, which may include waiving essential health benefit requirements. However, unlike the House bill, the Senate uses a waiver process that is already in place – section 1332 waivers, with additional changes to the current waiver program. Like the House bill, it also changes insurer age rating to allow older adults to be charged as much as five times younger people. Premium subsidies would be provided to people in the individual market making up to 350 percent of the poverty level beginning in 2020. The current cutoff is 400 percent of the  poverty level. The insurance subsidy system would also be less generous than under current law, and based on 58% of actuarial value (the cost of a low-level bronze plan), rather than a silver plan (which the Centers for Medicare and Medicaid Services has estimated to be near 70% actuarial value). The bill includes a provision to tighten subsidy eligibility on the basis of immigration status. Medicaid expansion would be phased from 2021 until 2024. Unlike the House bill, Federal spending on Medicaid would be capped using a more stringent measure of inflation (CPI-U), rather than the medical inflation rate (CPI-M) used in AHCA, beginning in 2025. The bill includes an additional $2 billion in fiscal year (FY) 2018 to address the opioid epidemic and (like the House bill) would defund Planned Parenthood for one year.

It is possible that McConnell made intentional omissions in the discussion draft so that senators can secure public victories in return for their vote. The Majority Leader plans to formally introduce a bill as early as Tuesday, followed by the marathon vote-a-rama amendment process later in the week, with a floor vote on final passage as early as Friday morning. McConnell must secure the votes of 50 of his Republican colleagues in order to pass the bill under reconciliation. This means that he can only afford to lose two votes given unanimous Democratic opposition to the measure. GOP leadership has expressed confidence that the chamber will successfully pass the bill.

The discussion draft has received strong praise from the President and Speaker of the House Paul Ryan (R-Wis.), but as it currently stands, there are five Republican senators opposed to the bill, with 14 undecided. The most conservative senators, including Rand Paul (KY), Ted Cruz (Texas), Ron Johnson (Wis.), and Mike Lee (Utah), continue to demand a more complete repeal of the 2010 health care law with a greater focus on lowering premiums and costs. Sen. Cruz is requesting additional state waivers from insurance regulations, allowing the purchase of insurance across state lines, and additional easing of regulations for insurers. Meanwhile, moderates like Sen. Dean Heller (R-Nev.) continue to express concerns about the phase out of Medicaid expansion. Sens. Lisa Murkowski (R-Alaska) and Susan Collins (R-Maine) are also pushing to remove the bill’s one-year elimination of funding for Planned Parenthood. Sen. Rob Portman (R-Ohio) would like the Senate bill to include additional funds to combat the opioid epidemic. Leadership must also consider how changes will impact the likelihood of clearing the House of Representatives.

The Majority Leader’s process for bringing a health care reform bill to the floor has been criticized by both Republicans and Democrats in recent weeks. Senate Democrats held the floor well in to the night last Monday to disrupt procedure and call attention to a lack of hearings or public debate on the measure. The protest was organized by Sens. Patty Murray (D-Wash.) and Brian Schatz (D-Hawaii). Some Republicans have also expressed disagreement with the arbitrary and selfimposed deadline to vote on the bill prior to the July 4th recess, especially given the lack of transparency and short amount of time provided for members to review the bill text.

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