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Senate Republican Obamacare Replacement Bill Lacks Support

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On July 13, 2017, Senate Republicans unveiled a revised bill to repeal and replace the Affordable Care Act. The revised bill, entitled the “Better Care Reconciliation Act of 2017,” updated the replacement bill that Senate Republicans had originally proposed on June 22, 2017. However, due to uniform opposition from Senate Democrats as well as a small number of Republican Senators, it is expected that if it came to a vote, the revised bill would be unsuccessful. Instead, on July 18, 2017, Senate Majority Leader Mitch McConnell suggested that the Senate would next take up a straight repeal of the Affordable Care Act without replacement legislation in place. Repeal legislation had passed the Senate and the House in 2015, but then President Barack Obama had vetoed the legislation.

Some of the key aspects of the proposed revised bill include the following:

  • The bill decreases Medicaid funding expansion. In addition, federal funding for Medicaid would be converted to a per capita allotment or a block grant, depending on each state’s preference. This will have the effect of reducing federal funding for the Medicaid program, with the potential result that states will reduce Medicaid eligibility.
  • The Affordable Care Act requirement that insurers not exclude individuals with pre-existing conditions or charge them higher rates would remain. However, the bill would allow insurance companies to sell cheaper, deregulated insurance plans as long as Affordable Care Act-compliant plans are still sold as well. Critics worry that this could result in split risk pools, one with sick people with pre-existing conditions and the other with healthy young people. Insurance companies would receive subsidies for high-risk individuals with pre-existing conditions.
  • The bill provides $45 billion to combat the opioid epidemic.
  • The bill would keep the two taxes imposed by the Affordable Care Act on people with high incomes: the 3.8 percent tax on investment income and the 0.9 percent payroll tax. The taxes apply to individuals with income over $200,000 and couples with income over $250,000.
  • The Affordable Care Act mandate that individuals purchase insurance or pay a penalty would be eliminated. Instead, there would be a six-month waiting period for individuals who seek insurance after failing to maintain continuous coverage for a certain period of time during the prior year.

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