The Senate Won't Vote on Trumpcare (Yet)

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Senate Republicans had been hoping to vote this week on their Affordable Care Act (ACA) replacement plan. However, the bill appears to be heading back to the shop for more work, after the Congressional Budget Office (CBO) released an analysis showing it could cause 22 million to lose their health insurance coverage. Earlier today, Senate majority leader Mitch McConnell said a vote will have to wait until after the Senate's July 4 recess.

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What's the hubbub?

Republicans won the White House and Congress with plans to repeal and replace the Affordable Care Act, or Obamacare, and last month, the House of Representatives voted to pass the American Health Care Act (AHCA) to do just that.

However, the AHCA met with stiff resistance in the Senate, and as a result, Republicans crafted a new bill that they believed could win over holdouts who said they wouldn't support the AHCA in its current form.

The work resulted in the Better Care Reconciliation Act of 2017 (BCRA), a solution that reinstates income-based subsidies the AHCA had eliminated. The AHCA proposed switching to age-based tax credits instead. The BCRA's plan, however, is less generous than Obamacare because it provides help only up to 350% of the federal poverty level, instead of up to 400%.

The BCRA also keeps cost-sharing reductions in place through 2019 to make repealing Obamacare less onerous to low-income households. Currently, cost-sharing reductions are provided to people with income up to 250% of the federal poverty level to help cover the cost of co-pays and other out-of-pocket medical expenses.

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As with the AHCA, the BCRA would convert Medicaid to a block-grant program, effectively rolling back Medicaid expansion in states that adopted it under the ACA. The BCRA decreases funding for Medicaid expansion until it's eliminated entirely in 2023. Initially, federal Medicaid funds will be based on the number of people enrolled in each state, and that amount will grow alongside inflation. After 2025, funding will be tied to the Consumer Price Index, which historically has increased more slowly than medical inflation.

The BCRA differs from the AHCA in that it allows community rating, which requires insurers charge people with pre-existing conditions the same amount they charge healthy individuals of similar age who live in the same community.

Furthermore, the BCRA eliminates the health-insurance mandate, allows states to opt out of requiring that insurers provide minimum essential coverage, and lets insurers charge seniors up to five times the premiums they charge younger Americans. Currently, they can be charged only up to three times younger members.

Why delay?

The CBO is a non-partisan group that scores proposed legislation to determine its impact, and yesterday, it provided its scoring of the BCRA.

The BCRA would cause more people to choose high-deductible health plans with lower premiums, but 22 million people would also go without health insurance. Some people would cancel their health insurance willingly once the mandate is repealed, while higher costs associated with decreasing subsidies would force others out of the market.

The Medicaid expansion provisions in the BCRA have a particularly big impact on the CBO's findings. According to the CBO, 8 million people will lose Medicaid coverage by 2020, 11 million by 2022, and 15 million by 2026.

What's next?

Republicans wanted to vote before senators went back to their home states over the weekend, but now that that's off the table, disgruntled voters will have an opportunity to make their case. 

At least some of those upset by the CBO's findings will be older Americans represented by the AARP. The nonpartisan group has been a vocal critic of provisions in the AHCA and BCRA that could make seniors pay higher premiums than they do today.

According to the CBO, the uninsured rate among people age 50 to 64 with household income above 200% of federal poverty levels will grow to 9.4% from 6.8%, and the number of people aged 50 to 64 people with income below 200% of the federal poverty level who are without insurance will more than double. Those findings don't suggest the AARP will warm up to the BCRA anytime soon.

Ultimately, getting the bill through the Senate may require changes to the BCRA that provide more support to Medicaid and reduce the risk that older Americans will lose coverage. Only time will tell how drastic those changes will need to be. 

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