Senate GOP unveils draft of healthcare overhaul bill

On Thursday morning, Senate Republicans finally unveiled a draft version of their bill that would repeal and replace the Affordable Care Act.

The draft (PDF), which is titled the "Better Care Reconciliation Act of 2017," has many similarities to the version passed by the House in May. For example, it repeals the ACA’s individual mandate and several of the law’s taxes on the healthcare industry—including the health insurance tax. But it also includes several key differences.

Crucially for insurers, the legislation will fund cost-sharing reduction payments through 2019. Both Congress and the Trump administration had previously refused to say what would happen to those subsidies after a court case challenging their legality is resolved, which made it difficult for insurers to decided where to offer ACA exchange plans next year and how to price them.

Here’s a look at the other key parts of the bill:

For Medicaid:

  • The Senate’s bill phases out Medicaid expansion from 2020 to 2024.
  • Like the House bill, the Senate’s measure would change Medicaid’s open-ended funding structure to a per-capita cap arrangement. However, the Senate’s measure makes even deeper cuts Medicaid funding starting in 2025.
  • It allows states to require nondisabled, nonelderly, nonpregnant individuals to satisfy a work requirement before being eligible for Medicaid coverage.

For the individual market:

  • Unlike the House bill, which replaced the ACA’s income-based premium subsidies for individual market customers with age-based tax credits, subsidies are income-based in the Senate’s version. But they are considerably less generous than the ACA’s—capping income eligibility at 350% of the federal poverty level rather than 400%.
  • The measure would set aside $15 billion per year in 2018 and 2019, and $10 billion per year in 2020 and 2021 for arrangements with health insurers “to address coverage and access disruption and respond to urgent healthcare needs within states.”
  • It also sets up a "long-term state stability and innovation program," which would get $62 billion in funding over eight years.
  • Like in the House bill, the Senate's draft measure gives states flexibility to opt out of many of the ACA's provisions regulating the individual markets. But the Senate's version uses a different mechanism, instead tweaking existing 1332 waivers.