The Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) released an updated cost estimate on July 20 of Senate Republicans’ revised, third discussion draft of the Better Care Reconciliation Act (BCRA), also released on July 20 by the Senate Budget Committee. The revised version would repeal and replace, in part, the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) and related taxes.
The second draft of the BCRA was released earlier in July (TAXDAY, 2017/07/14, C.1), shortly before Senate leadership announced that the bill had failed to garner enough support among Republicans (TAXDAY, 2017/07/19, C.3). At this time, it is unclear whether Senate leadership will move for a vote on this version, which has thus far been unable to attract the requisite 50 Republican votes, or revert back to its recently announced new plan to move forward on a partial repeal-only vote. Even the repeal-only measure currently faces resistance among several Republicans, however (TAXDAY, 2017/07/20, W.1).
According to the CBO, the latest draft of the BCRA would result in greater deficit reduction than in previous versions, $420 billion over the 2017-2026 budget window, largely because of a reduction in Medicaid funding and the retention of several ACA -enacted taxes. Originally, Senate Republicans had proposed to repeal the net investment income tax (NIIT) and the additional Medicare tax. The second draft, as well as this revised, third version, retains both of those ACA taxes (TAXDAY, 2017/07/14, C.1). Additionally, the excise tax on high-dollar, employer-sponsored health plans, known as the so-called “Cadillac” tax, remains but would be delayed until 2026.
Under the revised BCRA, an increase of 15-million people would be uninsured in 2018, as compared to current law estimates. Twenty-two-million people are estimated to be uninsured by 2026. The CBO estimates that 82 percent of all U.S. residents under age 65 would be insured, as compared with 90 percent as estimated under the ACA.
Although the CBO estimates an increase in premiums in 2018 and 2019, as compared with current law, it further estimates a decrease in premium costs beginning in 2020. “In 2020, average premiums for benchmark plans for single policyholders would be about 30-percent lower than under current law,” the CBO said. It is further estimated that premiums would be lower by 25 percent as compared to current law by 2026.
Senate Majority Leader Mitch McConnell, R-Ky., told Wolters Kluwer on July 20, “As discussions continue within the Conference on health care, the Congressional Budget Office once again confirmed this legislation will reduce the growth in premiums under Obamacare, reduce taxes on the middle class, and reduce the deficit.”
Senate Minority Leader Charles E. Schumer, D-N.Y., took to Twitter on July 20 to criticize the BCRA after the CBO’s updated projections. “The GOP health care plan would jack up out-of-pocket costs for middle-class families under the guise of lower premiums and deficit reduction,” Schumer said. “Senate Democrats remain eager to work with the GOP to lower premiums, stabilize the marker and improve coverage for millions of Americans,” he added.
By Jessica Jeane, Wolters Kluwer News Staff
Discussion Draft of an Amendment in the Nature of a Substitute to the Tax Provisions Contained in Title I of HR 1628, the Better Care Reconciliation Act of 2017, Posted on the Senate Budget Committee Website on July 20, 2017
Senate Budget Committee Section-by-Section Summary of an Amendment in the Nature of a Substitute to HR 1628, the Better Care Reconciliation Act of 2017
CBO Cost Estimate of HR 1628, the Better Care Reconciliation Act of 2017: An Amendment in the Nature of a Substitute, as Posted on the Website of the Senate Committee on the Budget on July 20, 2017
JCT Estimated Revenue Effects of an Amendment in the Nature of a Substitute to the Tax Provisions Contained in Title I of HR 1628, the Better Care Reconciliation Act of 2017, as Posted on the e Website of the Senate Committee on the Budget on July 20, 2017, JCX-39-17