Health Care Repeal and Replace, or Repair Instead?

US Capitol Building

According to multiple sources, the Senate Republicans will introduce an updated version of the Senate’s version of the American Health Care Act, called the Better Care Reconciliation Act (H.R. 1628) (BCRA) this week with hopes of voting on the measure next week. Protests during the July 4th recess and continuing in the halls of the Senate now make passage of BCRA less likely. Up to 10 Republican Senators have expressed reservations about the bill-passage in the Senate requires that all but 2 Republican Senators must vote for the measure. Senate Majority Leader Mitch McConnell (R-KY) will be briefing the full 52 Republican caucuses on the Congressional Budget Office (CBO) analysis of proposed alterations to the bill today or tomorrow, with the hopes of mustering the support he needs for passage. 

Late last week, U.S. Senate Republican leader Mitch McConnell (R.KY.) admitted that Congress will have to pass a measure to shore up private health insurance markets if it fails to repeal the Affordable Care Act (ACA), as reported by the Associated Press. The AP reported that McConnell said: “If my side is unable to agree on an adequate replacement, then some kind of action with regard to the private health insurance market must occur… No action is not an alternative”, …We’ve got the insurance markets imploding all over the country, including in this state.”

Interestingly, in a June 30 letter, released on July 5th, the American Academy of Actuaries stated that the funding included in the BCRA to stabilize the individual health insurance market could at least partly offset premium increases from eliminating the ACA individual mandate. As a reminder, the BCRA allocates $15 billion in both 2018 and 2019, and $10 billion in both 2020 and 2021, for short-term stabilization funding to cover high-cost claims in a reinsurance program.  The ACA included a reinsurance program from 2014 through 2016, which lowered premiums between 10 percent and 14 percent in 2014, the AAA said.

According to the actuaries, the individual market in the ACA exchanges as well as outside of the exchanges is facing large premium increases and fewer insurers offering products due to insurer losses as well as insurer uncertainty about what changes will be made to the ACA. The health insurance industry is calling for greater subsidies for low-income people to help them pay their out-of-pocket expenses. It also wants a continuation of the ACA’s reinsurance program as a way of stabilizing the market in the short term. It appears that if “repeal and replace” does not succeed, “repair” must be undertaken to keep the ACA from imploding, leaving millions with limited or no coverage options.

 

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