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  • Washington Highlights

    AAMC Opposes Senate Health Care Reform Bill

    Jason Kleinman, Senior Legislative Analyst, Govt. Relations

    The Senate June 22 released a discussion draft of its health care reform bill, the Better Care Reconciliation Act of 2017 (BCRA). The bill would dramatically restructure Medicaid financing, modify the premium tax credits, and loosen 1332 waiver requirements, among other provisions.

    AAMC President and CEO Darrell G. Kirch, MD, June 22 stated, “We are extremely disappointed by the Senate bill released today. Despite promises to the contrary, it will leave millions of people without health coverage, and others with only bare bones plans that will be insufficient to properly address their needs. As the nation’s medical schools and teaching hospitals see every day, people without sufficient coverage often delay getting the care they need. This can turn a manageable condition into a life-threatening and expensive emergency.”

    Dr. Kirch added, “We urge members of the Senate to reject this bill and return to the drawing board to draft legislation that does not result in millions of Americans going without health insurance. The AAMC stands ready to work with Congress to craft a solution that protects and improves the health of all.”

    The bill would make major changes to the financing of the Medicaid program. Beginning in fiscal year (FY) 2020, Medicaid would shift to a per capita system that would grow by the medical care component of the Consumer Price Index (CPI) for children, expansion adults, and other non-elderly/non-disabled/non-expansion adults. Beginning in FY 2025, the trend factor would be reduced for all eligibility groups to the growth of CPI-Urban. Additionally, beginning in FY 2020, states may opt to receive a block grant rather than federal Medicaid payments under a per capita cap. States would make the election for a five year period and could automatically continue their block grant programs for another five years.

    The bill also phases-out enhanced funding for Medicaid expansion over three years beginning in 2021.Beginning in January 2024, states’ regular matching rates would apply to the expansion population.

    The Senate bill largely maintains the advanceable and refundable tax credit structure as set forth by the House-passed American Health Care Act (AHCA, H.R. 1628). Beginning in 2020, individuals with incomes between 0-350 percent of the federal poverty level (FPL) will be eligible for a tax credit under BCRA, as opposed to 100-400 percent under current law. The bill also increases the amount individuals must contribute towards the cost of their coverage from between 2 to 9.5 percent under current law to 2 to 16.2 percent.

    While the bill allows for an inpatient psychiatric service benefit, it lowers the level of specific funding for these services from $15 billion in the House-passed bill down to $2 billion. Finally, the bill allows states to apply for a waiver that would allow them to remove essential health benefit requirements, thus potentially permitting insurers to offer bare-bones plans.

    The Senate is planning to vote on the legislation next week. However, several Senators have already expressed their opposition to the measure as currently drafted. It is unclear whether the legislation will be changed prior to being brought to the floor for a vote, or if it will be changed through the amendment process.