By Scott Lyon, Senior Vice President
Edited to Add: As of Monday, July 18th it was determined that Senator McConnell did not have enough support to call for a vote. Stay tuned as this continues to unfold.
In 1987, the book The Art of the Deal was released outlining now President Donald Trump’s formula for business success. The book took roughly two years to write, edit and release and sold in the vicinity of 1 million copies. Fast forward 30 years; today Senate Majority Leader Mitch McConnell is trying to craft a sequel and he would like just 50 Senators to buy his book. We will call this book The Art of the Compromise as he tries to cobble together the votes needed to pass a repeal/replacement bill to the Affordable Care Act. Senator McConnell is working for compromise between the conservatives and the more moderate members of the Republican Party. To say that the balancing act required is a challenge would be an understatement. It is proving to be a difficult and heavy lift. Like a good mystery novel, the outcome is anyone’s guess.
A couple weeks back, I wrote about the Senate Better Care Reconciliation Act (BCRA), you can read that article here. Most of what I wrote then applies now, including the difficult task to gather 50 votes to get the bill out of the Senate, the need for the legislation to make its way back across the Capitol to the House of Representatives, etc. As Senator McConnell tries to reel in a couple of the conservative hold outs and at the same time not lose a couple more moderate members of his party, deals are being offered. In the latest version you can see a few of these emerge, including:
- Allowing insurance carriers that sell an ACA approved plan to also sell plans that do not meet the ACA coverage requirements. Presumably, these plans will cover less and therefore cost less and are designed to attract (or keep) the young and healthy enrolled in a health insurance plan when the individual mandate is eliminated.
- Allocating $45 billion for the battle against opioid addiction.
- Allows dollars in a Health Savings Account to be used to pay for health insurance premiums.
- Allocates additional dollars to help pay for high risk individuals with pre-existing conditions.
- Leaves in a couple of ACA taxes on people making $200,000 (individuals) and $250,000 (married filing jointly) including a 0.9% payroll tax and a 3.8% tax on investment income.
Senator McConnell has his work cut out for him to get this passed in the Senate; he is hoping to get a vote on this late next week. We will see if that can happen because, so far, he has struggled to even get the 50 votes required to open Senate debate on the legislation, not that there is not a whole lot of debating and negotiating going on outside of the walls of the Senate.
Trying to stay in my lane, I can’t see how it this version will help small businesses any differently than the original version. There is very little evidence of an attempt to get after the cost of providing health care and the changes made in this version are primarily directed toward the individual market. Allowing carriers to sell non-ACA compliant plans will help some small businesses, but carriers will need to offset those reductions via plans that cover less and possibly by raising the prices of more comprehensive plans. Couple that with the elimination of the individual and employer mandate and I worry that the group markets will destabilize due to cost shifting from inside and outside.
One last thought regarding the “cuts” to Medicaid funding and the 16 million fewer people enrolled in Medicaid. The “cuts” are actually less of an increase. The costs and the numbers enrolled still go up, just not as much as projected under the Affordable Care Act. Only in Washington is less of an increase a decrease!
Stay tuned, there are more chapters to come, and the Small Business Association of Michigan will be sure to keep you up-to-date.