Explainer: What you should know about the Better Care Reconciliation Act (BCRA)
Religion & Liberty Online

Explainer: What you should know about the Better Care Reconciliation Act (BCRA)

Earlier today Senate Republicans released the text of the Better Care Reconciliation Act (BCRA), their budget reconciliation proposal to repeal-and-replace the Affordable Care Act (aka Obamacare).

Here is a summary of the changes being proposed:

• Eliminates the individual mandate tax penalty (by reducing the amount owed to $0).

• Eliminates the employer mandate tax penalty (by reducing the amount owed to $0).

• Delays implementation of the so-called Cadillac tax until taxable periods beginning January 1, 2026.

• Allows all individuals purchasing health insurance in the individual market the option to purchase a lower premium catastrophic plan beginning on or after January 1, 2019.

• Repeals the language in that stipulates a medicine or drug must be a prescribed drug or insulin to be considered a qualified expense in terms of spending from a tax-advantaged health account.

• Reduce the applicable rate to 15 percent and 10 percent for health savings accounts.

• Repeals the contribution limit for health Flexible Spending Accounts, effective for plan years beginning in 2018.

• Repeals tax on prescription medications and the excise tax on medical devices.

• Repeals the health insurance tax.

• Repeals the cost-sharing subsidy program.

• Repeal of elimination of deduction for expenses allocable to Medicare Part D subsidy.

• Repeals the Chronic Care Tax.

• Repeals the tax on indoor tanning services.

• Prohibits, for one year, federal funds made available to a state through direct spending from being provided to Planned Parenthood.

• Allows Health Savings Accounts to be used to pay qualified medical expenses for account holder’s children who are under the age of 27.

• Increases the Health Savings Account annual contribution limits for self-only and family coverage to match the out-of-pocket limits for HSA-qualified HDHPs for self-only and family coverage.

• Allow both spouses to make catch-up contributions to the same health savings account.

• Disallows Health Savings Account funds to be used to pay for an high-deductible health plan that provides coverage for abortions (except if necessary to save the life of the mother or if the pregnancy is the result of rape or incest), beginning in 2018.
Requires any individual who was overpaid in premium tax credits to repay the entire excess amount, regardless of income, beginning in taxable year 2018.

• Changes the premium credit’s eligibility criteria to 350 percent of the federal poverty level from 100-400 percent. The bill also makes changes to the eligibility criteria applicable to certain aliens, and prohibit individuals with access to any employer-sponsored coverage from becoming eligible for the credit.

• Indicates that the term “qualified health plan” does not include any health plan that includes coverage for abortions, except abortions necessary to save the life of a mother or abortions for pregnancies that are a result of rape or incest.

• Removes the small business health insurance tax credit beginning tax year 2020.

• Appropriates $15 billion for each of CY2018 and CY2019 and $10 billion for each of CY2020 and CY2021 to the Medicare and Medicaid to fund arrangements with health insurance issuers to “assist in the purchase of health benefits coverage by addressing coverage and access disruption and responding to urgent health care needs within states.

• Establishes a Better Care Reconciliation Implementation Fund within HHS to provide for administrative expenses to carry out the draft bill and appropriates $500 million to the fund.

• Establishes small business health plans.

• Appropriates to the HHS Secretary (1) $4,972,000,000 for each of FY2018 –FY2026 to provide grants to states to support substance use disorder treatment and recovery support services and (2) $50,400,000 for each of FY2018 –FY2022 “for research on addiction and pain-related to the substance abuse crisis.” Such funds would remain available until expended.

• Provide an additional $422 million for FY2017to the Community Health Center Fund.

• Establishes an age rating ratio of 5:1 for adults for plan years beginning on or after January 1, 2019. That is, a plan would not be able to charge a 64-year-old individual more than five times the premium that the plan would charge a 21-year-old individual. States would have the option to implement a ratio for adults that is different from the 5:1 ratio.

• Insurance companies offering plans in the individual market on or after January 1, 2019 would be required to impose a 6 month waiting period on individuals who had a gap in “creditable coverage” (as defined by the statute).

• Allows certain waivers for state innovations in implementing this law.

• Sets requirements for establishing federal funding for individual market plans.

Note: This summary does not include any of the revisions to Medicare or Medicaid.

Joe Carter

Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).