Professional Service Agreement

Discussion Draft of Senate Healthcare Bill Repeals Individual, Employer Mandates

June 26, 2017

Senate Republicans have released a discussion draft of their health care overhaul bill. The bill—the Better Care Reconciliation Act of 2017 (H.R. 1628)—would repeal the individual and employer mandates and end the small business tax credit in 2019.

The exclusion of abortion services also figured prominently in the bill—for example, it prohibits federal Medicaid payments to states for providers that provide for abortions, other than an abortion resulting from rape or incest or when the woman is danger of death unless an abortion is performed.

Tax repeals. The legislation would eliminate the following:

  • the individual mandate;
  • the employer mandate;
  • the tax on employee health insurance premiums and health plan benefits;
  • the tax on over-the-counter medications;
  • the tax on health savings accounts;
  • limitations on contributions to flexible spending accounts;
  • the tax on prescription medications;
  • the medical device excise tax;
  • the health insurance tax;
  • elimination of the deduction for expenses allocable to the Medicare Part D subsidy;
  • the chronic care tax;
  • the Medicare tax increase;
  • the tanning tax; and
  • the net investment tax.

State stability. The legislation would appropriate a combined $50 billion from 2018 to 2021 to fund arrangements with insurers to address coverage and access disruption, and respond to urgent health care needs in states. It also creates a long-term stabilization fund for states, which would provide financial assistance to help high-risk individuals enroll in health insurance and provide assistance to reduce out-of-pocket costs.

Premium tax credit. Under section 1401 of the ACA, the premium tax credit applies to taxpayers with incomes whose household income is between 100 and 400 percent of the federal poverty level. Section 102 of the "Better Care" bill would limit the applicability of the premium tax credit to those whose income is less than 350 percent of the federal poverty level.

Waivers. If a state has a grandfathered managed care waiver, it may, through state plan amendment, continue to implement the managed care delivery system that is the subject of the waiver without submitting a new application, as long as the state does not modify the terms and conditions of the waiver.

Democratic leaders respond. House Democratic Caucus Chairman Joe Crowley (D-N.Y.) and House Minority Leader Nancy Pelosi (D-Calif.) quickly registered discontent with the bill that was cobbled together behind closed doors.

"The Senate Republicans’ health care repeal bill is cut from the same cloth as the disastrous House-passed Trumpcare," Crowly said in a statement. "It slashes coverage and raises costs for millions of Americans. These proposals are simply unacceptable to Democrats fighting for hardworking men and women and their families. From weakening tax credits that help people afford coverage, to gutting the Medicaid program that supports nursing home care and services for children with disabilities—all the while giving tax cuts to the wealthiest Americans—the Senate has taken a path that is just as mean as the House, if not more.

"Similar to its counterpart passed in the House last month, this legislation would reduce the tax credits available for purchasing health coverage, phase out the Affordable Care Act’s Medicaid expansion, and allow states to remove basic protections on what insurance must cover. The bill also includes the Collins-Faso ‘Empire State Kickback’ that would cost New York State $2.3 billion."

Pelosi said: "At long last, the public can read the Trumpcare discussion draft Republicans have worked so hard to hide from the American people. The President called the House Republican bill ‘mean,’ and now we know that Senate Republicans’ version is just as heartless and cruel.

"The Senate draft proves Trumpcare fundamentally means higher health costs, tens of millions of hard-working Americans losing health coverage, gutting key protections, a crushing age tax, and stealing from Medicare. In fact, Senate Republicans made the devastation to working families and seniors with long-term care needs on Medicaid even more severe—destroying jobs across America."