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What's inside the Senate Republican health care bill


Senate Republicans have released an updated version of the health care bill, which seeks to repeal major portions of Obamacare and reform health care in America. CNNMoney breaks it down for you.
Senate GOP lawmakers announced changes to their health care bill Thursday in hopes of securing more moderate and conservative votes.
The new bill includes several changes to the original, which was released in June. One of the most significant was the inclusion of an amendment by Texas Senator Ted Cruz, which would allow insurers offering Obamacare plans to also offer cheaper, bare-bones policies.
Overall, though, the Senate legislation largely mirrors the House bill, making sweeping changes to much of the nation’s health care system. But it also keeps more of Obamacare’s structure in place.
Like the House version, the bill would drastically cut back on federal support of Medicaid, which will likely force states to shrink their programs and people to lose coverage. However, the Senate bill would maintain much of Obamacare’s subsidy structure to help people pay for individual coverage, but make it less generous, particularly for older enrollees.
As in the House bill, senators would repeal the mandates that require most Americans to obtain insurance and most employers to offer it. While it would keep Obamacare’s taxes on the wealthy, it would eliminate them on insurers, medical device manufacturers and others.
But the Senate version also provides funds to stabilize the Obamacare market over the next few years, including allocating money for a key set of subsidies that insurers receive.
The Republican effort to repeal Obamacare has had a lot of critics, ranging from conservative lawmakers to moderate ones to insurers to the AARP. The Senate bill would lead to 22 million fewer people having coverage by 2026, according to the non-partisan Congressional Budget Office. And President Trump called the House version “mean.”
Related: New GOP health care bill could allow cheaper plans with fewer benefits
Proponents of the bill say it would save the individual health market from collapse. The legislation would provide Americans more choice, greater control and lower costs, they argued.
But opponents said it could reverse the gains in coverage that have been made since the Affordable Care Act was enacted in 2010.
What the bill calls for
Allow insurers to sell skimpier, less expensive plans: The so-called Consumer Freedom amendment being pushed by Cruz would let insurers that offer Obamacare plans on the exchanges to also sell policies that are exempt from certain of the law’s mandates. That could allow carriers to provide less comprehensive plans with lower premiums, which would likely attract younger and healthier Americans.
But that would leave the sicker, more expensive consumers in the Obamacare plans, causing their premiums to spike.
Offering Obamacare plans will also make insurers eligible for new federal funding aimed at helping them pay for high-cost enrollees.
Related: Ted Cruz’s Obamacare repeal plan would cripple the market, experts say
Revamp Medicaid funding. Just as in the House bill, the Senate version would send the states a fixed amount of money per Medicaid enrollee, known as a per-capita cap.
States could also opt to receive federal Medicaid funding as a block grant. Under the latter, states would get a set amount of federal funding each year, regardless of how many participants are in the program. Block grants wouldn’t apply to funding for the elderly, disabled or children.
Either option would limit federal responsibility, shifting that burden to the states. However, since states don’t have the money to make up the difference, they would likely either reduce eligibility, curtail benefits or cut provider payments. The block grant would be more restrictive since the funding level would not adjust for increases in enrollment, which often happens in bad economic times.
The Senate bill would also shrink the program even more over time by pegging the annual growth rate of those funds to standard inflation, rather than the more generous medical inflation, starting in 2025.
The revisions to the bill would provide temporary additional funding to help states pay for home-based services for the elderly, blind and disabled and to aid states in combating public health emergencies, such as the Zika virus.
End enhanced federal funding for Medicaid expansion. The Senate would end the enhanced match rate for low-income adults covered under Medicaid expansion starting in 2021, one year later than in the House bill. It would then phase out the enhanced funding over three years, bringing federal support down to the traditional match rate starting in 2024. States, however, would have a tough time making up the difference, likely leading many to curtail enrollment, benefits or provider payments.
Allow states to institute work requirements for Medicaid. States would now have the option of requiring able-bodied Medicaid recipients to work. The disabled, elderly and pregnant women would be exempt, however.
Related: Senate GOP health plan may not protect millions on Medicaid expansion
Continue basing subsidies on income. Obamacare provides premium subsidies based on enrollees’ income and cost of coverage in their area. The House bill would have offered refundable tax credits based mainly on age.
The Senate bill jettisons the House plan, instead providing assistance similar to Obamacare’s subsidies. But the Senate’s subsidies would be based on income, cost of coverage and age.
The Senate bill would tighten the eligibility criteria starting in 2020, shutting out more middle class folks from government help. Only those earning up to 350% of the poverty level ($41,600) would qualify, rather than the 400% threshold ($47,500) contained in Obamacare.
It would also open up the subsidies to enrollees below the poverty level so those living in states that didn’t expand Medicaid could get some assistance to buy policies on the private market — though it’s questionable whether the poor could afford coverage even with the subsidies. Those eligible for Medicaid could not get the subsidies.
Peg subsidies to plans with higher deductibles. One notable change the Senate is making to the subsidy structure is to tie the payments to a less generous insurance plan. Under Obamacare, subsidy payments are based on the price of the second-lowest cost silver plan in one’s area. In 2017, the average deductible for a silver plan was just under $3,600, according to Health Pocket, an insurance shopping site.
The Senate, however, would provide subsidies based on the cost of bronze plans, which had an average deductible of nearly $6,100 in 2017. This means consumers will likely have to pay more out of pocket to see the doctor and get treatment, though it reduces how much the federal government has to spend on the subsidies.
The Senate bill would also scale back the subsidies if they cost more than 0.4% of the nation’s GDP, the most common metric of the nation’s economy.
The revised bill calls for allowing consumers to use their subsidies to buy catastrophic plans. These are high-deductible policies that cover three primary visits a year, but generally have lower premiums.
Make older consumers pay more. The Senate bill makes the subsidies less generous for older consumers with moderate incomes. They would have to put a larger share of their income towards coverage than younger ones earning the same amount. For instance, a 60-year-old enrollee making 350% of the poverty line would have to pay 16.2% of his income towards premiums, while a 29-year-old would only have to shell out 6.4%.
Loosen the age-band so insurers can charge older folks more. Under Obamacare, insurers could only charge older enrollees three times more than younger policy holders. The GOP bill would widen that band to five-to-one, which would hike premiums for those in their 50s and early 60s, but reduce them for younger folks.
Related: Comparing the Senate health care bill to Obamacare and the House proposal
Repeal the individual and employer mandates. Both the Senate and the House would get rid of the Obamacare provision that people must have health coverage or face a tax penalty. It would also eliminate the requirement that employers with at least 50 employees provide health insurance to their workers.
Under Obamacare, these companies were required to provide affordable insurance to staffers who work more than 30 hours a week. They would face a penalty if they did not meet this criteria and their employees sought subsidies on the exchanges. These repeal provisions take effect retroactively as of 2016.
Unlike the House bill, the Senate plan would not levy a 30% premium surcharge on those who let their coverage lapse. This was designed to keep people — particularly healthy ones — in the market, which would lower premiums.
Maintain ban on insurers setting premiums based on health status.

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