5 Things Payers Need to Know: Senate’s Better Care Reconciliation Act (BCRA)

Yesterday, the Senate GOP released the Better Care Reconciliation Act (BCRA), a response to the House’s American Health Care Act (AHCA) passed in early May. These bills are part of the new administration’s effort to repeal and replace the Affordable Care Act (ACA).

Zelis’ Vice President of Legislative Affairs, Matthew Albright, identifies five things healthcare payers should know about the “discussion draft” of the Senate bill:

  1. Taxes: BCRA eliminates, zeroes out, or postpones most of the ACA taxes/penalties. This includes those associated with the individual and employer mandates, as well as the Cadillac Tax, the net investment tax, and taxes on employee premiums and benefits, over-the-counter and prescription medications, medical devices, and tanning salons. The bill also removes the medical loss ratio requirements from federal control and requires states to set the ratios for the program.
  2. Benefits: BCRA technically keeps the essential health benefits and consumer protections such as those for pre-existing conditions, but allows states to easily loosen the requirements. The bill also permits a 5 to 1 variation in premium rates based on age.
  3. Market stability: BCRA funds cost-sharing payments to plans through 2019. It also sets up a state stability funding program with nearly $100 billion through 2026 for states to “respond to urgent health care needs,” including assistance for high-risk individuals and stabilizing state exchange premiums.
  4. Association health plan programs: BCRA creates a Small Business Health Plan program that allows interstate association health plans to be formed and regulated by the Department of Labor, though it does not allow these plans to be self-insured.
  5. Tax credits: Like the ACA, BCRA provides tax credits for health insurance based on income, but lowers the bar to 350% of poverty line.

The headlines will also emphasize the BCRA roll back of ACA’s Medicaid expansion over three years and its transitioning of Medicaid to a per capita cap or block-grant program under state control. BCRA also defunds Planned Parenthood for a year.

BCRA leaves many elements of the ACA untouched, including the EFT mandate and network adequacy and access provisions.

“BCRA still has a number of hoops to go through in the next week or so,” Albright notes, “including a Congressional Budget Office analysis expected next week, and an analysis by the Senate parliamentarian to confirm the bill meets the reconciliation requirements. And, of course, at least 20 hours of debate in the Senate.”

Zelis will continue monitoring the bill’s progress and communicating major developments.