How the Senate Health Bill Compares to House Bill, Obamacare

By Stephanie Armour and Michelle Hackman Features Dow Jones Newswires

Now that Senate Republican leaders have released the latest version of their health bill, here's a closer look at how it diverges from the House-passed version and from the 2010 Affordable Care Act.

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Helping the Uninsured

What the ACA does: People who don't get insurance on the job can get tax credits to offset their premiums, and in some cases to lower their out-of-pocket costs, for plans purchased on the insurance exchanges. The credits take into account income, age and the local cost of insurance.

What the House bill would do: People without employer-sponsored coverage can get tax credits, but they would vary largely based on age. For many people, the credits would be smaller than under the ACA. Individuals can use the credits for plans sold anywhere, not just on the exchanges.

What the Senate bill would do: The Senate's approach is closer to the ACA's. The tax credits would be larger for people with low incomes, those who live in areas with high medical costs, or older Americans. As in the House bill, many people would get smaller tax credits than under the ACA. People could also use the tax credits to buy catastrophic health plans with lower premiums and higher deductibles that mainly pay for three primary care visits a year. People could also for the first time use health savings accounts to pay for premiums.

In addition, the bill allows insurers to sell cheaper health plans that don't comply with any ACA requirements if they also separate plans on ACA marketplaces that do comply. The bill sends funding to insurance companies that would help keep prices on the marketplaces down.

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Medicaid

What the ACA does: The law provides enhanced federal funding to states that expand Medicaid eligibility for residents up to 133% of the poverty level. About 14 million new enrollees have been added as 31 states and the District of Columbia expanded that eligibility, with states picking up very little of the cost.

What the House bill would do: The Medicaid expansion would freeze in 2020, becoming limited to current enrollees. States would have to make up the difference in cost if they wanted to maintain the expansion for new enrollees.

Funding for the broader Medicaid program would change from a guaranteed matching-fund system to either a block grant or a per capita cap. The result would be 14 million fewer Medicaid beneficiaries through 2026, compared with the ACA, according to the Congressional Budget Office.

What the Senate bill would do: Enhanced federal funding for the expansion would roll back over three years, beginning in 2021. States could choose between block grants or per capita caps, but both options would curb their overall federal Medicaid funding. States could add a requirement that some people must work to get Medicaid. States could also get exemptions from the spending limits during certain public health emergencies. A separate $45 billion fund will also be created specifically to fund opioid treatment programs.

Taxes

What the ACA does: Obamacare, as it is known, imposed a number of taxes to help fund health-insurance subsidies. These include a tax on health insurers, a so-called Cadillac tax on generous employer health plans (which has been delayed), a medical-device tax and a tax on individuals who earn more than $200,000 a year.

What the House bill would do: The majority of the ACA's taxes would be repealed, amounting to more than $590 billion in tax cuts over the next 10 years. The bill does retain the much-debated Cadillac tax, but delays its implementation until 2026.

What the Senate bill would do: The bill retains several of the ACA's taxes, including a 3.8% tax on investment income and a 0.9% tax on wealthy individuals. The Cadillac tax would be retained but wouldn't go into effect until 2026. It would knock down the ACA's other taxes, including taxes on indoor tanning, repeal limits on contributions to flexible-spending accounts and health-insurance premiums. The tax on medical devices would also be repealed.

Insurance Rules

What the ACA does: Most health-insurance plans in the small group and individual market must cover 10 benefit categories that include hospitalization, maternity care and mental health. People with pre-existing health conditions can't be denied coverage or charged higher premiums. Insures can't charge older adults more than three times the premium amount charged to younger people.

What the House bill would do: States could get waivers allowing them to roll back the 10 required benefits. States could also use waivers to let insurers charge older adults premiums five times higher than younger people. Other waivers would let insurers temporarily charge people with pre-existing health conditions higher premiums if they let their coverage lapse. At the same time, states would get $138 billion over 10 years for policies that help people with expensive conditions afford premiums.

What the Senate bill would do: Insurers would still have to cover people with pre-existing conditions without charging them higher premiums, though people who let their coverage lapse would have to wait six months before getting coverage. The bill sets aside money for states that pursue waivers through the Department of Health and Human Services. These waivers would let them roll back ACA regulations, including the 10 required health benefits.

Write to Stephanie Armour at stephanie.armour@wsj.com and Michelle Hackman at Michelle.Hackman@wsj.com

(END) Dow Jones Newswires

July 13, 2017 13:18 ET (17:18 GMT)