WASHINGTON -- After much anticipation, Senate Republican leaders released a draft version of their bill to repeal and replace the Affordable Care Act (ACA) on Thursday -- and it looks similar to the bill passed last month by the Republican-controlled House, with a few noteworthy changes.
For instance, under the House bill, the Affordable Care Act's federal Medicaid expansion would end in 2020; the Senate bill, known as the "," would end the program beginning in 2024. In terms of federal Medicaid spending cuts, analysts say the Senate bill appears to be roughly similar to the House bill, which would cut Medicaid by about $800 billion, .
On the insurance exchanges, the Affordable Care Act offers subsidies to those with incomes less than 400% of the federal poverty level. The House and Senate bill each handle the subsidies in a different way than the ACA does, explained Caroline Pearson, senior vice president for policy and strategy at Avalere Health, a healthcare consulting firm here.
"The House bill had six flat-dollar subsidies for people of any income level; this [Senate bill] has income adjusted subsidies only up to 350% [of the poverty level], but unlike the ACA, older people will pay more -- about 2.5 times what younger people pay -- so that's a change," she said.
The bill does not touch the ACA's requirement that private insurers cover certain "essential health benefits," although it does eliminate that requirement for Medicaid plans beginning in 2020.
And unlike the House bill, it does not levy any penalty on people who do not maintain continuous health insurance coverage. However, "We're hearing this is still potentially being debated," said Pearson. "We could see movement on that before the vote. [But] it looks like it's absent from this draft of the bill."
Nor does it say anything about allowing insurers to set premiums based on health status. In this case, "omission is protection," Pearson said.
Gail Wilensky, PhD, a senior fellow at Project HOPE in Bethesda, Md., said one provision that troubled her a little was that the bill bases any Medicaid spending increases after 2025 on the consumer price index for urban consumers (CPI-U) rather than the medical CPI (CPI-M), which would go up faster.
“CPI-U would be too low,†said Wilensky, who ran the Centers for Medicare & Medicaid Services under President George H.W. Bush. “My assumption is that if [that provision] were OK with some moderates, it’s only because they would assume they would get a change [on it] before it goes into effect.â€
Overall, Wilensky said she liked the Senate bill better than its House counterpart. “I do think that going down to the CPI-U is not going to be tolerable, but that is a relatively small [issue]. It’s very important that they have subsidies relating to income,†although whether those will be adequate is a different issue, she said.
“I think it’s a legislative masterpiece on the part of Leader [Mitch] McConnell,†said Robert Laszewski, president of Health Policy and Strategy Associates, in Alexandria, Va.
“The conservatives are getting pretty much what they wanted under Medicaid [a complete repeal of expansion and a per-capita defined payment] and the moderates are getting pretty much what they wanted under Obamacare,†Laszewski said, noting that the new bill “provides a much more robust safety net†in the individual market.
While the bill could be characterized as “Obamacare lite,†there’s a reason for that, he continued.
McConnell knew he couldn’t pass a bill without the moderates. So it is now up to hard-line conservatives to decide whether to accept a compromise or “fail to change Obamacare,†Laszewski said.
Another policy scholar, Doug Badger, a senior fellow at the Galen Institute, also based in Alexandria, Va., described the Senate bill as “more generous than the ACA.â€
“Under the ACA, tens of million of people with incomes below the Federal Poverty Level (FPL) get no government assistance for their health insurance. Under this bill, beginning in 2020 every individual would get federal assistance,†said Badger, who was a White House adviser to President George W. Bush.
In expansion states individuals can join Medicaid and, under this bill, those in non-expansion states who fall under the 100% FPL could buy insurance at a rate equal to 2% of their income, Badger said.
The Senate bill, like the House bill, eliminates funding for Planned Parenthood, and also includes a provision -- like one in the House bill -- that would prohibit giving subsidies to pay for health insurance plans that cover abortions. And it allows states to impose a work requirement on Medicaid recipients, including new mothers who have given birth at least 2 months prior.
Also included in the Senate bill is the House bill's state stability fund -- money that states can use to shore up the marketplaces, or "respond to urgent healthcare needs." The Senate bill would provide $15 billion each year in 2018 and 2019, and $10 billion per year in 2020 and 2021.
On the private health insurance side, the level of health insurance coverage in the Senate bill appears to be much less generous than the ACA’s has been, because rather than the ACA’s requirement that a “silverâ€-level plan cover, on average, 70% of the patient’s health insurance costs, the bill drops that percentage to 58%, said Timothy Jost, JD, an emeritus professor at the Washington and Lee University School of Law, in Lexington, Va. “So, even though it’s income-based, low-income people could [afford] the premiums, but not the level of coverage.â€
The bill’s retention of the ban on pre-existing condition exclusions and its inclusion of the stability funds are helpful, “but it seems that what they’re trying to do is get a CBO score showing more people will be covered … but the coverage will be so much less generous it won’t make much difference to people,†he said. “They’ll have an insurance card but they won’t be able to get care because their deductibles and coinsurance will be much higher.â€
Overall, "The bill still reduces coverage for low-income people very dramatically," Pearson said. "There are potentially somewhat better protections for people with preexisting conditions than what we saw in the House bill, so those folks will be able to buy insurance, but it's not clear they'll be able to afford those benefits from a cost-sharing perspective. It will be a much skinnier benefit and lower rates of insurance for lower- and middle-income people."
The Senate bill is “just about as bad†as the House bill, said Alan Sager, PhD, professor of health law, policy, and management at Boston University. With the slower phaseout of federal funding for the Medicaid expansion, “It’s a little more dying by asphyxiation and a little less dying by bleeding to death.â€
Sager expressed disappointment that neither the House bill nor the Senate bill — nor the ACA — contained real cost control measures. “Half of our health spending is wasted … Neither the Senate bill nor the House bill has any reform that squeezes out waste, catches it in a bucket, and recycles the savings to expand coverage, to go after prescription drug out-of-pocket costs, or do any of the other things that would make American healthcare more efficient.â€
Robert Greenstein, president of the Center on Budget Policy and Priorities, said the new bill is “harsher and would do even more damage than the House bill.â€
While provisions impacting those on the exchanges are less “severe†the cuts to the Medicaid program are much deeper and would, in time, nearly destroy the program, he said. Greenstein said, as the CBPP and other analysts have found, “Medicaid cuts in the Senate bill ultimately become several hundred percent larger and several times bigger than under the House bill.â€
In time, this would lead to states “taking whole categories of poor people off the program, starting to [cut] various key health services and cutting already low provider rates.â€
“Medicaid is not a lot of program with a lot of fat where one can easily get savings without doing great damage,†Greenstein said.
The only differences between the House and Senate version of the bill are “shades of gray,†said Kavita Patel, MD, MPH, a nonresident Fellow at the Brookings Institution and a practicing primary care internist at Johns Hopkins Medicine.
Moreover, changes that appear to benefit vulnerable individuals may not have the intended affect.
For example, in Texas, or another non-expansion state, the bill appears to increase access to care through the addition of federal assistance for those below 100% FPL, however in 2 years when the cost-sharing subsidies—federal funding that helps lower out-of pocket costs— are eliminated, the resulting high-deductibles will quickly put care out of reach.
“I want there to be a bill that actually fixes some of the problems in the insurance market, I just don’t think this is it,†Patel said.
Dania Palanker, JD, MPP, assistant research professor at Georgetown University agreed with Patel, adding that the bill would raise premiums and increase deductibles for millions of low-income and middle-income Americans.
“Providing these tax credits while undermining the cost-sharing protections is almost a mirage for individuals in poverty … The coverage is not real,†Palanker continued.
What happens next is unclear; the bill normally would undergo hearings in various Senate committees, but Senate Majority Leader Mitch McConnell (R-Ky.) has previously indicated he would send it straight to the Senate floor without any hearings. If it passes the Senate, it would then be referred to a Senate-House conference committee, which would fashion a single bill from the two bills. That new compromise bill would then be voted on by both the Senate and House.
Shannon Firth, Washington Correspondent, contributed to this story.