Jun 21, 2017

Senate health bill would fund controversial ACA subsidies

J. Scott Applewhite / AP

The Senate health care bill is scheduled to be released tomorrow, and we're hearing the state of play is extremely fluid. What we reported yesterday is changing today, and different people have different understandings of what's in the bill. But one big thing that's in play: Republicans may take a different route to give states flexibility on the Affordable Care Act's insurance regulations.

Here's the latest on what we're hearing:

  • The bill would fund the ACA's cost-sharing subsidies — a key sticking point for insurers — through 2019.
  • It also would provide a four-year reinsurance program to help states stabilize their marketplaces.
  • Subsidies would be available to people making up to 350 percent of the federal poverty limit — down from 400 percent under the ACA. That includes people under 100 percent of the federal poverty limit, who currently don't receive subsidies under the ACA (the law assumed this population would be on Medicaid).

Market reforms

  • The House's optional state waivers probably will not be included in tomorrow's draft bill (yesterday, we reported that the plan was to include essential health benefit waivers, per several senior GOP aides). The House bill allowed states to waive the Affordable Care Act's essential health benefits and its ban on charging higher premiums to sick people.
  • But the Senate gives much greater flexibility to the ACA's existing state waivers (for wonks, 1332 waivers), and expedites their approval. The ACA laid out strict conditions for what the waivers could do, and the GOP bill would loosen these — which could be a different means to the same end.
  • What would be waivable:Essential health benefitsActuarial value, or the requirement that plans cover a certain percentage of an enrollee's health care costsThe definition of a quality health planNot the ban on charging sick people higher premiums than healthy people, nor the requirement that insurers sell plans to people with pre-existing conditions

Tax Credits

  • Aides are fairly certain they won't be able to create a new tax credit for people buying on the individual market that includes the pro-life Hyde amendment, per Senate budget rules.
  • The backup plan is to leave the current ACA premium subsidy structure in place, but to scale it back.
  • However, the bill will also include an insurer stabilization fund, like the House bill. This probably will be funneled through the Children's Health Insurance Program, which does contain the Hyde amendment. Thus the stabilization fund can't be used to cover abortions.
  • Since most plans will use the stabilization fund, they won't be allowed to cover abortions — a roundabout way of including pro-life protections.
  • What's unclear is whether tomorrow's draft will create a new tax credit structure with Hyde amendment protections, which will probably be stripped out before the vote on the bill, or whether it'll skip straight to including the revised ACA subsidy structure.


  • We haven't heard anything new here today. Still a lower growth rate than the House beginning in 2025 and a three-year glide path for phasing out Medicaid expansion.
  • It will also let states choose the base amount for their per capita caps based on eight consecutive quarters.

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