July 21, 2017

Growing Republican Opposition Imperils BCRA

In a stunning turn of events, on July 17, Senators Mike Lee (R-UT) and Jerry Moran (R-KS) announced their opposition to the latest version of the Better Health Care Act (BCRA). The BCRA is comprehensive plan to repeal and replace the Patient Protection and Affordable Care Act (PPACA), also known as “Obamacare.”

Republicans only have a slim 52–48 majority in the Senate. Repealing and replacing PPACA via reconciliation, an arcane parliamentary procedure that prohibits a Senate filibuster and allows select bills to pass with a simple majority, posed a major challenge to the GOP. Things became more complicated last week after Senators Susan Collins (R-ME) and Rand Paul (R-KY) announced that they opposed the latest BCRA draft.

Senate Democrats also remain united in refusing to work with Senate Republicans on any bills designed to repeal and replace the vast majority of PPACA. The defection of Senators Lee and Moran denies Senate Majority Leader Mitch McConnell (R-KY) the 51 votes needed to pass BCRA under reconciliation.

Majority Leader McConnell released the first version of a comprehensive Republican plan to repeal and replace PPACA on June 22. Although similar to the American Health Care Act (AHCA) which passed the House of Representatives in early May 2017, BCRA was designed to be a unique legislative proposal. Senate Republicans and outside stakeholders provided in-depth feedback on the first proposal. This prompted Majority Leader McConnell to publish a revised version of BCRA on July 13.

Like the AHCA, both BCRA “discussion drafts” consisted of five major policy components. These are: elimination of many existing PPACA taxes, creation of new health care tax credits to assist individuals purchasing health insurance, expanded access to health savings accounts (HSAs), federal funding to assist insurers and states to stabilize the individual market, and Medicaid reforms.

A recent addition to BCRA designed to appeal to younger, healthier Americans was proposed by Senator Ted Cruz. This would also permit insurers, effective in January 2020, to sell “skinny,” more affordable non-compliant PPACA insurance plans in the individual market, if the carrier also provided PPACA compliant plans via the health insurance exchanges. This new provision would also allow carriers that elect to sell insurance plans that do no not comply with PPACA’s mandates to charge beneficiaries a form of cost-sharing, such as copayments, coinsurance, and deductibles, associated with receiving routine screening procedures as determined or approved by various federal agencies and advisory bodies, such as the United States Preventive Services Task Force. It is unknown whether Senator Cruz’s provisions would have been stripped out of BCRA after being deemed in violation of the complicated “Byrd Rules” governing bills considered under reconciliation.

The American College of Radiology (ACR) continues to closely monitor Senator Cruz’s new legislative language to assess its impact on patient cost sharing associated with receiving life-saving cancer screening services, such as mammograms, low-dose CT lung cancer scans, and CT colonography for colon cancer. The ACR previously published an updated summary of the latest BCRA version. The College also maintains a website “clearing house” that outlines the latest information on Congressional efforts to repeal and replace PPACA.

Although BCRA has essentially no hope of becoming law in its current format, Senate Republicans still have many legislative options at their disposal. It is unlikely that the GOP will completely abandon efforts to repeal Obamacare. In fact, on July 18 Majority Leader McConnell announced he will begin working with Senate Republicans on a new strategy. They would enact a bill that closely mirrors legislation passed in 2015 under reconciliation, specifically H.R. 3762, the Restoring Americans’ Healthcare Freedom Reconciliation Act. This bill altered and repealed numerous aspects of PPACA including, but not limited to:

  • Zeroing out penalties for noncompliance with the individual and employer mandates
  • Ending individual premium tax credits, cost-sharing reduction payments to insurers, and the optional Medicaid expansion
  • Eliminating all of the provisions associated with assisting low-income beneficiaries in purchasing health insurance after two years
  • Preventing the “reinsurance” program from making any payment or collecting contributions
  • Repealing numerous PPACA imposed taxes including: the small business tax credit, the Cadillac tax on expensive health plans , the over-the-counter drug tax, the tax on brand manufactured prescription drugs, existing restrictions on HSA and FSA contributions, the 2.3 percent excise tax on medical devices, the health insurance tax, existing limitations on tax deduction for employers who offer sufficient prescription drug coverage to their employees via the Retiree Drug Subsidy, the higher adjusted gross income percentage threshold for medical expense itemized deductions (the “Chronic Care Tax”), 0.9 percent Medicare payroll and 3.8 percent capital gains taxes on “high earners,” the tanning tax, and existing limitations on tax deductions associated with remuneration for insurance executives
  • Terminating the ACA’s Prevention and Public Health
  • Repealing funding cuts to disproportionate share hospitals imposed after the passage of PPACA  

Unlike BCRA, H.R. 3762 did not include any Republican policies for replacing the repealed aspects of PPACA. Instead, the legislation outlined a two-year transition period to a yet-to-be-determined health care alternative. Former President Obama ultimately vetoed H.R. 3762 in January 2016.

Similar to BCRA and the AHCA, a January 2017 nonpartisan Congressional Budget Office (CBO) analysis of H.R. 3762 found the legislation would lead to coverage losses and higher premiums. CBO estimated that the number of uninsured Americans would increase by 18 million in the first new plan year following enactment of H.R. 3762. Later, after the elimination of PPACA’s Medicaid expansion and subsidies for insurance purchased through the exchanges, the number of uninsured would increase to 32 million by 2026.

Premiums in the individual market were projected to increase by 20–25 percent, relative to projections under 2016 law, in the first new plan year following enactment of the bill. The premiums, in turn, would essentially double by 2026, largely due to elimination of the Medicaid expansion and insurance exchange subsidies.

Senate Majority Leader McConnell released legislative language on July 19 that was virtually identical to H.R. 3762 and a vote on this forthcoming bill is expected at some point next week. It is unclear whether legislation focused solely on repealing PPACA would generate enough support to pass the Senate considering three senators already announced their opposition to this approach. Senator Cruz’s amendment was also not included in this most recent health care reform legislation. A new CBO score pertaining to the PPACA repeal bill released on July 19 largely reaffirmed the findings of the January 2017 analysis.

The ACR Government Relations office will continue to closely follow the latest Congressional efforts related to repealing and replacing PPACA.