Overview of the Better Care Reconciliation Act As Drafted on June 28, 2017

1. Overview of the Better Care Reconciliation Act As Drafted on June 28, 2017 1

2. Overview Purpose: This document provides a summary of the Better Care Reconciliation Act as drafted on June 28, 2017. What’s Next: The Senate will likely make changes to this draft before the legislation is brought to the floor for a vote after the July 4th Recess. If the package is passed, it will need to be merged with the House bill (American Health Care Act) via a “conference committee” (unless the House agrees to pass the Senate bill “as is”). A summary of the American Health Care Act as it was passed by the House of Representatives on May 4, 2017 is available here. HFMA will continue monitoring these events and post updates as warranted.

3. Better Care Reconciliation Act (BCRA) BCRA Key Issues Addressed by the Bill Include: • Coverage Incentives and Subsidies • Market Reforms • Stability Funding • Medicaid Expansion • Medicaid Per Capita Cap • Medicaid Eligibility Determinations

4. Timeline of Key Provisions BCRA Changes in the BCRA Roll Out over Several Years

5. Timeline of Key Provisions BCRA Changes in the BCRA Roll Out over Several Years

6. Timeline of Key Provisions BCRA Changes in the BCRA Roll Out over Several Years

7. Premium Subsidies BCRA Starting in 2020, the BCRA Provides Subsidies, Limiting the Cost of the Benchmark Plan to a Percentage of Income Comparison to ACA BCRA Credits by Selected Ages and FPL • Similar: • Income Based • Credits Decrease as Income Increases • Different: • Credits Decrease as Age Increases • Credits Available from 0 – 350% instead of 100% - 400% FPL

8. Incentive to Maintain Coverage BCRA In 2019, BCRA Replaces the Individual Mandate with a “Continuous Coverage” Requirement to Minimize Adverse Selection Against Plans Example of How a Continuous Coverage Requirement Works Insured Dan >62 Day Coverage Lapse Unable to Buy Coverage for Six Months Insured Insured Dave *Individuals who lose coverage but qualify for “Special Enrollment Periods” are not subject to exclusions

9. Other Market Provisions BCRA BCRA Makes a Number of Changes to Subsidies and Mandates Impacting Coverage

10. Stability Funding BCRA BCRA Provides $112 Billion Over Nine Years to Help Stabilize Insurance Markets and Reduce the Cost of Coverage Insurance Market Stability Funding Proposed: 2018 - 2026 Funding Description • Short Term: • Direct Payments to Insurers Participating in the Individual Market • Long-Term: • Funds Must be Used to: • Help High-Risk Individuals Gain Coverage • Provide Payments to Reduce Cost Sharing • Make Direct Payments to Providers • Fund Risk/Adverse Selection Mitigation Programs • States Must Provide Matching Funds $, Billions

11. BCRA Medicaid Expansion Population States Will Receive an Enhanced Match for Expansion Population Individuals Enrolled by March 1, 2017 through 2023 ACA Expansion FMAP Compared to BCRA E-FMAP

12. BCRA Federal Medicaid Reform In FY 2020, a Per Capita Funding System Replaces the Federal Match Comparison of Traditional Medicaid to a Per Capita Cap

13. BCRA Medicaid DSH BCRA Reverses Medicaid DSH Cuts for Non-Expansion States • For Fiscal Years 2018 – 2025, DSH Cuts Would be Eliminated for Non- Expansion States • Non-Expansion States with a Ratio of 2016 DSH Allotment to 2016 Enrollment below the National Average Would Receive an Increase in Medicaid DSH

14. BCRA Medicaid Program Changes BCRA Makes Changes to Medicaid Eligibility Determination and Other Key Program Features Eligibility and Redetermination Changes • Hospital Presumptive Eligibility: Repeals requirement that states allow hospitals to make presumptive eligibility determinations (Effective CY 2020). • Limit Retroactive Eligibility: Retroactive benefits begin at the start of the month in which the application is made (Effective FY 2018). • Redeterminations for Medicaid Expansion Populations: Requires expansion states to re-determine expansion enrollee eligibility every six months (Effective FY 2018). • Work Requirements: Permits states to condition eligibility for non-pregnant, non-elderly adult beneficiaries on their satisfaction of a work requirement (Effective FY 2018).

15. BCRA Projected Impact – Medicaid Funding The BCRA Reduces Medicaid Funding by $722B Over 10 Years Relative to Current Law https://www.cbo.gov/publication/52486 Medicaid Spending Under Current Law vs. BCRA Spending is $160 B Lower in 2026 under BCRA $, Billions

16. BCRA Coverage Impact The BCRA Will Increase the Uninsured, Resulting in Increases in Provider Bad Debt and Demand for Charity Care https://www.cbo.gov/publication/52486 CBO Projected Changes in Coverage - AHCA Lives, Millions

17. Questions? • Chad Mulvany • Director, Healthcare Finance Policy, Strategy and Development • HFMA • 1090 Vermont Ave. NW • Suite 500 • Washington, DC 20005 • Office: 202.238.3453 • Email: dmulvany@hfma.org