What you need to know about the forces reshaping our industry.


July 24, 2017

These 11 provisions probably can't stay in the BCRA, parliamentarian rules

Daily Briefing

The Senate parliamentarian warned that several provisions of the Better Care Reconciliation Act (BCRA) likely do not comply with the Senate's budget reconciliation rules, according to guidance released Friday by Democrats on the Senate Budget Committee.

Learn the 3 steps to establishing an intentional Medicare risk strategy

About the process

Congressional Republicans are seeking to pass a bill to repeal and replace the Affordable Care Act through the budget reconciliation process, which allows certain bills to pass the Senate by a simple majority, without being subject to a filibuster.

However, any bill passed under that process must comply with strict rules that are applied by the parliamentarian—most notably, that its provisions must affect federal spending, rather than being policy changes with "merely incidental" budgetary effects. Any provision found to be in conflict with the Senate's rules requires at least 60 votes to remain in the bill.

Challenged provisions

Senate Parliamentarian Elizabeth MacDonough outlined about a dozen provisions included in a June 26 version of the BCRA that may not meet budget rules, and would need 60 votes to pass, including provisions that would:

  • Delay the effective start for new enrollees' coverage by six months if they went without coverage for at least 63 days the year prior, the so-called "lock-out" provision;
  • Eliminate in 2020 the ACA's 10 "essential health benefits" requirements for Medicaid alternative benefit plans;
  • Prohibit federal subsidies to be used to purchase health plans that cover abortion care;
  • Bar Planned Parenthood from receiving Medicaid payments for one year;
  • Repeal the ACA's medical loss ratio, which requires insurers allocate at least 80 percent of their premium revenue toward medical costs, rather than administrative costs or profits;
  • Repeal that ACA's cost-sharing reduction payments to insurers beginning in 2020;
  • Allow states that do not use all of their Medicaid block grant funding to redirect those unused funds to nonhealth projects;
  • Allow New York to shift Medicaid costs from the state's counties to its state government;
  • Call for the HHS secretary to encourage states to adopt Medicaid Home and Community Based Services waivers;
  • Require the HHS secretary to update Congress on certain Medicaid expenditure data collection; and
  • Require the HHS secretary to consult with states before finalizing Medicaid rules.

The loss of the bill's "lock-out" provision could prove especially consequential, Politico reports. That provision was added to the bill in response to concerns about "adverse selection"—that is, that unless healthy people are incentivized to purchase insurance, they might opt to remain without coverage, leaving only sicker people in the risk pool and driving premiums up.

MacDonough in the document signaled she is still considering other provisions, including those that would:

  • Allow states to waive the ACA's age rating, essential health benefits, and pre-existing condition coverage requirements for private health plans;
  • Allow small businesses to pool together to purchase health plans that be sold across state lines;
  • Give states the option of adopting a Medicaid block grant system as opposed to the BCRA's per capita allotment system; and
  • Increase the age-band ratio to allow insurers to charge older enrollees five times more for coverage than younger enrollees.

MacDonough's guidance is, for the moment, informal. She would formally rule on whether provisions comply with reconciliation rules only if those provisions are challenged during Senate debate.


According to the Times, some Democrats suggested that some key conservative votes hinged on including those provisions, meaning that striking them could jeopardize the Senate's chances of passing a health reform bill. For instance, the abortion-related provisions and the New York Medicaid provision are widely believed to be key to certain Republican lawmakers' support.

However, Don Stewart, a spokesperson for Senate Majority Leader Mitch McConnell (R-Ky.) suggested that the guidance could help Republicans further revise the bill. In a separate statement Sunday, a McConnell spokesperson said, "Senate will consider all types of proposals" and is "still on track ... to have a vote early this week." According to Politico, McConnell still plans to hold the vote on Tuesday.

President Trump in a tweet Sunday urged Republicans to support the upcoming vote, saying, "If Republicans don't Repeal and Replace the disastrous ObamaCare, the repercussions will be far greater than any of them understand!"

However, Sen. John Thune (R-S.D.) suggested that vote to proceed will happen this week regardless of whether Senate GOP leaders have the support to pass it. Thune said if the vote is unsuccessful Senate Republicans would "go back to the drawing board and get a bill up," adding, "We are going to vote to repeal and replace Obamacare. It's not a question of 'if,' it's a question of 'when.'"

It remains unclear which bill McConnell will seek to advance. Senate GOP leaders last week released an updated BCRA, which MacDonough did not use to form her guidance, and released new legislative text for a revived repeal-and-delay bill.

What happens next

If the motion to start debate on the House-passed American Health Care Act passes, McConnell during debate on the bill would offer a yet-to-be determined Senate health reform bill as a substitute for the House bill.

At the end of the 20-hour debate, the Senate would hold a so-called "vote-a-rama," during which senators could offer an unlimited number of amendments to the bill. Amendments considered "germane" to the bill require 51 votes to pass—with Vice President Pence casting the deciding vote in the event of a tie. The Senate would then need 51 votes to pass the final package and send it back to the House for consideration (Pear/Kaplan, New York Times, 7/21; Goldstein, Washington Post, 7/23; Rovner, Kaiser Health News, 7/21; Snell/Eilperin, "PowerPost," Washington Post, 7/21; Peterson, Wall Street Journal, 7/21; Meyer, Modern Healthcare, 7/22; Haberkorn/Min Kim, Politico, 7/21; Morin, Politico, 7/23; Ehley, Politico, 7/23).

Is your Medicare risk strategy MACRA-ready?

While the GOP's health reform effort continues to evolve, Medicare payment reform has quietly marched on with bipartisan support. And with MACRA well underway, the new administration has shown no signs of reversing course. As a result, hospital and health system leaders need to develop an intentional Medicare risk strategy today.

Check out our new research report to learn how to navigate the Medicare ACO programs, expand into the Medicare Advantage market, and ensure the longevity of your Medicare risk strategy by actively cultivating contracts over time.

Download the Report

Have a Question?


Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.