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June 26, 2017

Revised Senate bill is out—with a controversial 'lock-out' provision

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Senate GOP leaders on Monday afternoon released a revised version of the Better Care Reconciliation Act (BCRA), which includes some technical changes and adds a penalty for those who go without insurance. 

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The previous version of the BCRA, released Thursday, did not include such a penalty. Absent a provision penalizing people for not maintaining coverage, it's highly likely that some healthy people would choose not to purchase health insurance, since they could simply wait to purchase coverage after they get sick. As a result, the population insured on the individual exchanges likely would be sicker than the population at large, forcing insurers to raise premiums—a phenomenon known as adverse selection. 

The Affordable Care Act's (ACA) individual mandate—which requires those who do not carry health insurance to pay a tax penalty—is designed to prevent this problem. The House-passed American Health Care Act (AHCA) would aim to achieve a similar effect by allowing insurers to levy a 30 percent premium surcharge on individuals who purchase insurance in the small-group or non-group markets and who have been uninsured for more than 63 days in the previous year. 

Details of BCRA lock-out period

The revised BCRA would still include the ACA's open enrollment and special open enrollment period provisions. Starting in plan year 2019, the BCRA would require insurers in the individual market to impose a six-month waiting period on individuals who have been without coverage for at least 63 days over the previous year. Specifically, individuals subject to the waiting period:

  • Who apply during open enrollment or qualify for a special enrollment period would have to wait six months for coverage to start; and
  • Who do not apply during an open enrollment period and do not qualify for a special enrollment period would have to wait six months or until the first day of the next plan year—whichever is later—for coverage to begin

The individuals would not pay premiums during that lock-out period.

The lock-out provision would have exceptions for:

  • Newborns who are enrolled in coverage within 30 days of birth; and
  • Children who are adopted or placed for adoption prior to age 18 and enroll in coverage within 30 days of their adoption date.

Vox reports that some procedural experts are skeptical that the lock-out period will be allowed under the so-called Byrd rule, which governs the budget reconciliation process. Senior GOP aides told Politico that if the parliamentarian blocks the lock-out period language, they would ask HHS Secretary Tom Price to implement tighter enrollment rules.

As health care policy analyst Chris Jacobs noted, the revised Senate bill would have no penalty for lack of coverage for next year. He said that "could destabilize markets in 2018."

Larry Levitt of the Kaiser Family Foundation said that the six-month lock-out policy would be "kind of a stronger version" of the ACA's open enrollment period. If you had not maintained continuous coverage during the previous year, "you'd have to sign up during open enrollment, and then still wait six months," he noted.

Levitt added that the "likely biggest effect of a six-month waiting period would be to prevent some sick people from getting care immediately after signing up."

More changes likely to come

The move is one of several changes that are expected to be made to the BCRA this week in an attempt to secure the 50 votes needed to pass the bill in the Senate. Axios reports that Senate GOP leaders likely will release another version of the BCRA on Wednesday that will reflect "any more last-minute horse-trading."  Several GOP senators this weekend spoke out against the draft bill, casting doubt on whether the Senate GOP leaders would have enough support to vote this week.

Uncertainty in the ranks

As Senate GOP leaders work to reach a consensus on their health reform bill, several GOP senators this weekend spoke out against the draft bill released last week.

For instance, Sen. Dean Heller (R-Nev.) on Friday criticized the bill, saying it "takes insurance away from tens of millions of Americans" and does not lower premiums.

Sen. Ron Johnson (R-Wis.) on NBC's "Meet the Press" said, "There's no way we should be voting on this next week."

Sen. Bill Cassidy (R-La.) also questioned Senate leaders' process, saying, "I don't know quite why the rush." In regards to the bill itself, however, Cassidy said he was undecided, adding, "I, frankly, would like more days to consider this."

Sen. Rand Paul (R-Ky.) told ABC's "This Week" that he is opposed to the bill in its current form but could "get to yes if [leaders] change their approach" and eliminate the ACA's tax credits that are intended to help individuals purchase coverage. 

Sen. Susan Collins (R-Maine) who also appeared on ABC's "This Week," said she has "very serious concerns" with the current bill, including its steep cuts to Medicaid and the potential effect on premiums for older U.S. residents. She added, "It's hard for me to see the bill passing this week."

What happens next

While there is much uncertainty surrounding whether senators will get the 50 votes they need to pass the bill, there is less uncertainty about what needs to happen procedurally, Axios' "Vitals" reports.

The first step will come Monday, when the Congressional Budget Office releases a score of the Senate bill.

Once that score is released, the Senate can hold a vote to proceed on the House-approved American Health Care Act. According to Politico Pro's "Pulse," this version would function as a "shell" for the Senate bill, providing the legislative base from which the Senate could proceed.

If the motion to proceed to debate the bill passes, which would require 50 votes, lawmakers would have 20 hours to debate the bill, with the time equally divided between Republicans and Democrats.

Senate Democrats also would be able to raise points of order, arguing that certain provisions of the bill violate the chamber's budget reconciliation rules. If the Senate parliamentarian agrees, those provisions would be stricken from the bill.

Finally, the Senate would proceed to the so-called "vote-a-rama," in which senators can offer as many amendments as they wish to alter the bill. It's unlikely that any Democratic amendments would be accepted, so the "vote-a-rama" would serve primarily to prolong debate and allow Democrats to score messaging points by forcing Republicans to vote on controversial amendments.

The final amendment would be a substitute amendment, striking the language of the House bill and replacing it with the Senate plan ahead of the final floor vote (Kliff/Scott, Vox, 6/24; Pear/Kaplan, New York Times, 6/25; Everett/Haberkorn, Politico, 6/26; Schor/Min Kim, Politico, 6/25; Diamond, "Pulse," Politico Pro, 6/26; Allen, Axios, 6/26; Nather/Baker, "Vitals," Axios, 6/26; Dunsmuir/Whitesides, Reuters, 6/25; BCRA updated bill, 6/26; Nather, Axios, 6/26; Jacobs tweet [1], 6/26; Jacobs tweet [2], 6/26; Levitt tweet [1], 6/26; Levitt tweet [2]; 6/26; Roubein/Weixel, The Hill, 6/26).

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