IMS Statement on Federal Health Reform

Date of Publication July 13, 2017

The amendments to the U.S. Senate’s Better Care Reconciliation Act (BCRA) released this morning do little to address the concerns of IMS that tens of thousands of Iowa patients will lose health coverage as a result of this legislation.

Further concerning, the proposal to give insurers the option to offer a less-comprehensive health plan threatens to nationalize the problem we have seen here in Iowa — healthy, low-utilizing patients opting out of the marketplace coverage pool, leading to skyrocketing costs and the near collapse of our individual insurance market. The additional federal funding proposed today to help stabilize individual insurance markets is unlikely to be sufficient as more states will need stabilization assistance if this two-tier option is implemented.

We continue to study the revisions released this morning, as well as the alternative reform proposal put forward by Senators Graham and Cassidy.

Next week’s Congressional Budget Office (CBO) scoring for both proposals will provide much needed clarity as we seek to better understand the impact of the Graham-Cassidy proposal on coverage and healthcare funding, and whether the revisions to the BCRA will have any effect in reducing the coverage cuts projected under the original bill.

Proposed Revisions to BCRA

  • Retains three existing ACA taxes to increase funding available for reforms.
  • Increases funding for the state stabilization fund by $70 billion over the original bill.
  • Increases funding for opioid addiction treatment by $43 billion over the original bill.
  • Increases disproportionate share hospital (DSH) payments to offset the costs of uncompensated care (primarily impacting states that did not expand Medicaid).
  • Allows a state’s Medicaid per capita funding cap to be lifted in cases of a public health emergency.
  • Allows insurers to offer less comprehensive, lower cost health insurance plans as an alternative to marketplace plans.
  • Allows consumers to pay for their insurance premiums using tax-exempt health savings accounts.
  • Increases funding to treat opioid addiction.

Proposed Graham-Cassidy Alternative

  • Repeal the ACA’s Individual and Employer Mandates
  • Retain the ACA’s Limits on Preexisting Conditions and Required Essential Health Benefits Coverage.
  • Retains nearly all existing ACA taxes.
  • Creates a federal block grants system, modeled after the Welfare Reform Act of 1996, with provisions to allow states to retain federal funds if they maintain efficiency and quality of care.

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