Senate Republicans unveiled their healthcare plan yesterday after weeks of closed-door sessions. The plan proposes some pretty significant changes to existing healthcare law, both for you personally and for your business. Here’s what you need to know.
- Pre-existing conditions must still be covered.
This is an important place to start, because it explains some of the remaining points.
- Subsidies to Insurance Companies Remain.
The mandate to provide coverage for pre-existing conditions presents a challenge financially for insurance companies: People will often just wait until they get sick or injured to get insurance, spending no time paying into the system when they are well. To address this, Obamacare offered subsidies to insurance companies, among other things. Republicans originally opposed that idea (they even sued to stop them), but the new bill introduced Thursday maintains those subsidies and even allows back payments of them.
- Subsidies For Middle-Income Americans are reduced.
Obamacare provided subsidies for insurance purchase to families of four making four times the federal poverty level ($98,000). The Senate Republican bill reduces the cap to $86,000.
- The Bill Dramatically Alters Medicaid.
The House bill introduced last month proposed rolling back federal funding on a need-based basis beginning in 2020, and stopping the open-ended funding of expansion of Medicaid enrollees. The Senate bill retains that proposal, but would begin the rollback in 2021, with a growth cap on Medicaid payments linked to inflation rather than health cost inflation beginning in 2025. This would produce savings down the road provided those cuts stood up to a future Congress.
- The Individual and Employer Mandates Disappear.
Like the House bill, the Senate bill would repeal, retroactive to the beginning of 2016, the Obamacare rule requiring most Americans to have some form of health coverage or pay a tax penalty fine. And it would repeal, retroactively to the beginning of 2016, the employer mandate, which requires large employers to offer health insurance to workers or be fined.
While this bill tackles some big items that mainline Republicans want (restructuring the Medicaid entitlement and providing the necessary government cutbacks to allow the Congressional Budget Office to score savings which will then be applied to tax reform, most notably), it’s facing sharp criticism from hardline conservatives who say it just doesn’t go far enough, and certainly isn’t a true repeal of Obamacare. In fact, four big-name conservative senators, Mike Lee (R-UT), Rand Paul (R-KY), Ted Cruz (R-TX), and Ron Johnson (R-WI), have all said they cannot support this bill as written. Combined with criticism from Democrats, I’m not sure what chance this has in passing.
We’ll continue to monitor it and the entire healthcare situation as it unfolds.
