The Senate GOP Bill, Explained.

**This is a synopsis of an article originally published on FiveThirtyEight

The 142-page Senate GOP Bill known as the Better Care Reconciliation Act was released last week.

This article is a neutral, easily digestible explanation that breaks down the complexity of the bill, and describes the potential implications on current health insurance policies.

The newly released Senate GOP Bill would replace the Affordable Care Act (ACA), offering tax cuts to the wealthy, including a medical device tax, a tax on tanning salons and a tax on the insurance industry. The bill will impose drastic cuts to the expansion programs of Medicaid, and restrict reimbursements to Planned Parenthood clinics for a year. There would no longer be a mandate for health insurance and those who are uninsured wouldn’t be fined.   

The bill would decrease regulations on the insurance markets, which would lower premiums, reduce the amount and the cost of coverage, as well as limit access to insurance plans.

The ACA expanded Medicaid to cover citizens earning less than 138 percent of the federal poverty line, however, the Supreme Court ruled that each state could choose whether or not to participate in the expansion. The Senate GOP Bill would reduce federal assistance for Medicaid beginning in 2021. At least 8 states would end their expansion under the bill, due to caveats in the current agreement, specifying that they will cease Medicaid expansion if federal funding decreases.

20 percent of the population with Medicaid, including children, pregnant women, people with disabilities and seniors (in nursing homes) will be affected by the severe cuts in federal funding, and the strict limitations of how much states will contribute to Medicaid programs. Currently, the federal government reimburses states for a percentage of spending (which fluctuates annually) on Medicaid enrollees. Under the Senate GOP Bill each state would be responsible for the cost of Medicaid programming.

Each state has the potential to react in various ways: Some states may limit eligibility and reduce coverage of care. Some states may eliminate the program completely, and some states may seek financial backing to fund enrollees.  

The Senate GOP Bill does resolve an ongoing issue with the ACA: 2.6 million Americans in 19 states (that didn’t expand Medicaid programming) fell into the insurance gap. They earned too little to be eligible for assistance, but earned too much to qualify for Medicaid. Under the Senate GOP Bill, they would qualify for assistance, however, they would be required to spend roughly 2% of their income on premiums. 

For the 7 percent who buy private insurance (a.k.a., those buying insurance on the marketplace founded by the ACA), the Senate GOP Bill would change the types of coverage insurance companies offer; insurance companies would pay less of the enrollee’s costs each year, meaning higher co-pays and deductibles. The bill would alter how the subsidies are calculated as well. Under the Senate GOP Bill, assistance is linked to income and cost: if you make less and live in a network of expensive insurance coverage, you receive more assistance (like the ACA), but only if you make up to 350 percent of the federal poverty line, around $42,000 per year (the ACA cutoff is 400 percent).

The Senate GOP Bill would increase the amount certain people contribute to their insurance. For example:

A 60-year-old earning about $24,120 a year (about 200 percent of the federal poverty line) is currently expected to pay about $1,550 in premiums. Under the Senate bill, that would be $2,412. A 30-year-old earning that amount, however, would be expected to pay slightly less, about $1,400 under the Senate bill, compared with $1,550 under current law.

It is projected that the cost of insurance would decrease, causing lower premiums, because, insurance companies would have permission to sell plans that cover the bare minimum of annual costs, and offer fewer services. However, dissolving the mandate of having health insurance will cause fewer healthy people to become insured, in turn raising premium costs.

The ACA was criticized for “hurting the middle class.” The Senate GOP Bill would magnify this issue because it would severely restrict who can qualify for assistance. Citizens would no longer be fined for not having insurance, but the Bill won’t necessarily make it easier for those who want it, to afford it. 

The 49 percent who receive insurance through their employer are likely to be affected under the Senate GOP Bill, because, employers will no longer be required to offer health insurance. Presently, people with employer-sponsored insurance get a tax break on money they spend on their coverage. The Senate GOP Bill will maintain the “Cadillac Tax.” Under the bill, it would charge a 40 percent tax on insurance premiums that are paid beyond a cutoff. The tax wouldn’t begin until 2020, but would impact insurance plans costing $10,200 or more beginning in 2018. It is unclear how employers may adapt their plans to prevent employees from having to pay the tax. They may raise deductibles or reduce health care costs so the plans are less expensive.

The 9 percent of the population that remains uninsured is projected to increase under the Senate GOP Bill. The people who would be left uninsured are healthy, young adults who opt out of insurance or are unable to afford the premiums and those who currently qualify for Medicaid, but would be cut from the program under the new bill. Senior citizens may be left uninsured because insurers could raise their premiums as well as those in the middle class who are already uninsured because they can’t afford the existing high premiums. 

To summarize, the wealthiest people would get a large tax cut and the poorest would lose their insurance. The cost of insurance would go down, mainly for younger adults, however, middle class, older adults who aren’t Medicare-eligible (yet) will face higher premiums.

The country will confront the same issues: the Senate GOP Bill will not curtail overall spending on health insurance, leaving someone responsible for the cost. 

The ACA took money from the rich and used it to cover the needs of the poor, with the government paying the largest portion of the bill. Under the Senate GOP Bill, the costs would be the responsibility of those with the lowest incomes. 

Read the original article here.

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