Week ending June 16, 2017
H.R.2372 – VETERAN Act
Enactment of this bill and any budget effects is contingent on passage into law of the American Healthcare Act.
“…, the bill would codify regulations that allow veterans who are eligible for, but do not elect to be covered by, certain Veterans Affairs health programs to qualify for premium assistance tax credits. Under current law, people can purchase health insurance through marketplaces and receive such credits to cover part or all of the premiums if, among other criteria, they have income below certain amounts and are not eligible for certain types of health coverage. H.R. 2372 also contains a contingency under which the provisions would apply upon enactment of the American Health Care Act of 2017, which would provide new credits and eligibility requirements.” – crs
Opposition to the bill sees it differently ” it is not clear that H.R. 2372 would protect veterans who are enrolled in military-related coverage for limited benefits or services, as is provided by current regulations. The Republican AHCA does not have a minimum standard for coverage and allows states to waive essential health benefits; therefore, veterans enrolled for treatment of service-connected disability could be prohibited from receiving tax credits to help them secure coverage for other health care needs.”
(Full text of H.R. 2372 at congress.gov)
Sponsor: Rep. Johnson, Sam [R-TX-3] (Introduced 05/04/2017
Status: Passed House /
VOTES and FLOOR ACTION
On Passage: On passage Passed by voice vote
Motion to recommit:
Text of the motion:
COST AND IMPACT
Cost to the taxpayers: Because H.R. 2372 would in part codify existing regulations and in part be contingent upon enactment of subsequent legislation, the staff of the Joint Committee on Taxation estimates that the bill would have no effect on revenues or direct spending relative to current law
Pay-as-you-go requirements: pay-as-you-go procedures do not apply.
Regulatory and Other Impact: JCT has determined that the bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.
Dynamic Scoring: CBO and JCT estimate that enacting the bill would not increase on-budget deficits or net direct spending by more than $5 billion in any of the four 10-year periods beginning in 2028.
Tax Complexity: Not applicable to this bill.
Earmark Certification: Data not available
Duplication of programs: Data not available
Direct Rule-Making: Data not available
Advisory Committee Statement: Data not available
Budget Authority: In compliance with clause 3(c)(2) of rule XIII of the Rules of the House of Representatives, the Committee states that the bill involves no new or increased budget authority.
Constitutional Authority: Assumed.
VII. DISSENTING VIEWS
H.R. 2372 (Johnson, R-TX) would allow veterans who are not enrolled in military-related coverage to access tax credits (as modified by the American Health Care Act (AHCA), H.R. 1628) for the purchase of health insurance in the individual market. This legislation amends the AHCA, which, while passed out of the House, is not yet law.
This legislation is only necessary because of gimmickry in the underlying AHCA. Section 2 of H.R. 2372 was originally part of the AHCA legislation, but it was removed in the Manager’s Amendment in the Ways and Means Committee. It would have triggered a budget process (Byrd Rule), which would have required the Republicans to submit the AHCA to the Veteran’s Affairs Committee. H.R. 2372 would reinsert the provision.
As passed by the House in early May, the AHCA would prohibit any veteran eligible for government healthcare (such as VA and TRICARE) from receiving a tax credit even if the veteran has a non-group health plan. The important word is “eligible”–this could affect veterans who have never used the VA system and are not enrolled.
Veterans decline VA or TRICARE health care services for a wide variety of reasons, including enrollment requirements (i.e., length of consecutive service and time period of service, tiered prioritization of enrollment eligibility, and separation from service conditions), access issues (e.g., living far from VA services), and availability of other coverage options (e.g., employer-sponsored insurance).
Veterans are already protected under current law; this is a Republican attempt to repeal current law health coverage and protections that has caused the issue. Under current law, veterans are protected both if they are eligible for 15949 military-related coverage and do not enroll, or if they enroll in partial benefits, military-related coverage that does not meet the essential health benefits test. The purpose of Mr. Johnson’s bill is to ensure that the House-passed AHCA legislation is consistent with current law in its treatment of veterans.
However, it is not clear that H.R. 2372 would protect veterans who are enrolled in military-related coverage for limited benefits or services, as is provided by current regulations. The Republican AHCA does not have a minimum standard for coverage and allows states to waive essential health benefits; therefore, veterans enrolled for treatment of service-connected disability could be prohibited from receiving tax credits to help them secure coverage for other health care needs.
H.R. 2372 masquerades as help for veterans, but fails to address underlying flaws in the Republican health care bill that harm veterans. H.R. 2372 does not fix any of the problems for veterans caused by the AHCA bill, including loss of health insurance coverage, higher out-of-pocket costs, loss of essential benefits and treatments, or caps or limits on annual or lifetime coverage.
According to estimates by the independent, nonpartisan Congressional Budget Office (CBO), the AHCA would result in 23 million Americans losing health insurance coverage. This stems from a combination of inadequate out-of-pocket assistance, significant reductions in Medicaid enrollment and a change in rating practices that would allow insurers to charge significantly more for individuals with pre-existing conditions.
The Johnson bill does nothing to improve the inadequate tax credits under the MICA, which it amends. Under the AHCA, tax credits to purchase coverage do not account for the differences in the cost of coverage across the country or family incomes–which would make coverage completely unaffordable for countless American families. On top of that, this bill does nothing to eliminate the age tax in the AHCA, meaning older veterans would face significantly higher premiums.
The AHCA would allow pre-existing condition discrimination under its state waivers. Before Affordable Care Act (ACA) market reforms, military service was a condition for underwriting and discrimination.
The AHCA, as amended by the Johnson bill, would slash Medicaid coverage, jeopardizing affordable health coverage for the more than two million veterans who rely on Medicaid for their insurance. Millions more spouses and children of veterans rely on Medicaid; they too would be harmed. The AHCA cuts $834 billion from Medicaid and the Trump Administration’s budget proposes even deeper cuts. More than 40 percent of working-age veterans with Medicaid had no other source of coverage. The AHCA would jeopardize basic living standards and needed care for veterans who are struggling to make ends meet to pay for tax cuts for the rich. Medicaid provides the following that are critical for veterans’ health: mental health services; substance abuse and addiction services; physical therapy services; and general wellness care.
Amendments offered during consideration of H.R. 2372. Democrats offered a series of amendments to highlight the shortcomings of H.R. 2372 and the larger MICA, all but one were ruled non-germane by Chairman Kevin Brady (R-TX) and all but two of those ruled non-germane were appealed by Democratic Members. The appeals were then defeated by party-line votes. The one germane amendment offered by Congressman Davis (D-IL) was defeated by a party-line vote.
Congressman Doggett (D-TX) offered an amendment to reinstate the fee on brand pharmaceutical manufacturers, which helps fund Medicare. In repealing this fee, the Republican health legislation would increase Medicare Part B premiums by $8.7 billion. Striking the pharma fee from the House Republican plan would protect beneficiaries’ Medicare premiums. At a time of rising pharmaceutical profits and limited Social Security cost-of-living increases, this amendment would have helped ensure Medicare costs remain reasonable for beneficiaries.
Congressman Thompson (D-CA) offered an amendment to reinstate the tax on high-income earners which directly funds the Medicare Part A Trust Fund. The Republican health plan would repeal this tax, shortening the life of Medicare while giving a substantial tax break to the richest Americans. This amendment would prevent $75 billion being taken from the Medicare Trust Fund, which would reduce the solvency of the Medicare Trust Fund by one year.
Congressman Davis (D-IL) offered an amendment to adjust the tax credits in the Republican proposal to protect veterans under 400 percent of the poverty level to ensure that they would not pay more than 10 percent of their annual income toward the cost of health insurance premiums. While the Republican legislation gives billions of dollars in tax breaks to the wealthiest and most financially secure individuals, Mr. Davis’ amendment would have provided a small measure of protection for middle-income and working-class veterans. Under current law, tax credits are based on income and premium costs for families earning less than 400 percent of the poverty level. For instance, between 2016 and 2017, under current law, advanced premium tax credits kept premiums paid by individuals flat for 83 percent of Marketplace enrollees (about 10.1 million people) who received them. The Republican health bill would repeal this current law protection, which is embedded in the design of the tax credit.
Congressman Higgins (D-NY) offered an amendment to prevent veterans from being subject to the five-to-one (5:1) age rating established in the AHCA. Under the AHCA, older individuals could be charged 5+ times as much as younger individuals. However, unlike the current tax credits, which adjust to the cost of premiums, the AHCA tax credits are age adjusted well below the 5:1 ratio. This leads to seniors paying much more for health insurance coverage. As CBO noted in an updated score released in the middle of our mark-up, a 64-year-old senior could see his or her net premiums increase by more than $16,000 under the AHCA due to increased age rating and smaller premium tax credits than are available under current law. Rather than join with Democrats to protect veterans from the age tax, Republican members hid behind parliamentary tricks to avoid voting to support the veterans in their Districts.
Congresswoman DelBene (D-WA) offered an amendment to ensure that the current law protections for individuals with pre-existing conditions remain in place by rescinding the state waiver authority established in the AHCA. This provision of the AHCA would allow states to waive essential health benefits and allow insurance companies to, once again, discriminate against people with pre-existing conditions. As currently drafted, the Republican health bill undermines the guarantee that all health insurance policies cover essential health benefits like prescription drugs, mental health services, opioid addiction treatment, and maternity care. The AHCA threatens to bring back annual and lifetime limits on healthcare as prohibition of these limits only apply to essential health benefits. Therefore, this AHCA provision threatens not only individual market coverage but also employer-sponsored insurance. In fact, CBO stated that the waiver provision could have particularly detrimental consequences in their latest analysis: “However, the agencies estimate that about one-sixth of the population resides in areas in which the nongroup market would start to become unstable beginning in 2020. That instability would result from market responses to decisions by some states to waive two provisions of federal law, as would be permitted under H.R. 1628. One type of waiver would allow states to modify the requirements governing essential health benefits (EHBs), which set minimum standards for the benefits that insurance in the 15943 nongroup and small-group markets must cover. A second type of waiver would allow insurers to set premiums on the basis of an individual’s health status if the person had not demonstrated continuous coverage. . . .”
Before the ACA, 43 states and the District of Columbia allowed insurance companies to charge higher premiums to people with pre-existing conditions. As CBO noted, “In addition, premiums would vary significantly according to health status and the types of benefits provided, and less healthy people would face extremely high premiums, despite the additional funding that would be available under H.R. 1628 to help reduce premiums. Over time, it would become more difficult for less healthy people (including people with preexisting medical conditions) in those states to purchase insurance because their premiums would continue to increase rapidly.” This provision of the AHCA would have disastrous consequences for the millions of Americans with pre-existing conditions, including veterans.
Congresswoman Sanchez (D-CA) offered an amendment to prevent gender discrimination against female veterans under the AHCA state-waivers, which would once again allow for insurance companies to discriminate against preexisting conditions, including being a woman. CBO, in fact, noted that pregnant women could face thousands of dollars more in out-of-pocket costs under the Republican health bill.
Congresswoman Sewell (D-AL) offered an amendment to prevent states from enforcing future Medicaid work requirements on veterans receiving Medicaid. Research has shown that Medicaid work requirements would cause millions of enrollees with substantial health needs to lose coverage. Veterans have worked tirelessly on behalf of our country and should not be denied services for lack of employment.
Congresswoman Chu (D-CA) offered an amendment that would require qualified health plans purchased with a tax credit under the AHCA include mental health, behavioral health, and substance abuse treatment benefits. This amendment would insure mental health services are not put out of reach for working families because of artificially high premiums or out-of-pocket costs. This need is particularly important for veterans. According to a 2015 survey from the Iraq and Afghanistan Veterans of America, 58 percent of participating veterans reported having a mental health issue as a direct result of their service. A study from JAMA Psychiatry found the rate of post-traumatic stress disorder (PTSD) among veterans to be 15 times higher than civilians. And, according the Department of Veterans Affairs, suicide rates are 41 percent higher than the general population for deployed veterans, and 61 percent higher than the general population for non-deployed veterans. But, instead of addressing the dire need for mental health services for this vulnerable population, the underlying bill that H.R. 2372 amends would allow states to waive current protections and allow insurers to offer plans without essential health benefits, including mental health benefits. These waivers would permit insurers to charge people with pre-existing conditions–like, for example, PTSD–more for coverage.
Congressman Pascrell (D-NJ) offered an amendment to allow any individual suffering from Traumatic Brain Injury (TBI) to maintain current premium tax credits. TBI is one of the signature injuries of the wars in Iraq and Afghanistan, and many of our veterans are grappling with the consequences of these injuries. The RAND Corporation estimated that nearly 20 percent of the men and women deployed to Iraq and Afghanistan sustained a brain injury while in the line of duty. More than five million Americans are living with a life-long disability as a result of a TBI, and individuals that sustain moderate and severe TBIs require substantial medical care to recover and cope with their injuries. Access to the supports and services that they need to return to school and work and continue with their everyday lives often results in significant out-of-pocket costs even with health coverage. TBI survivors cannot afford to lose their insurance, nor can they afford any additional costs.
Congressman Kind (D-WI) offered an amendment to protect veterans from being charged more for pre-existing conditions under states that allow health status to be used for rating. Under current law, veterans are not allowed to be charged higher insurance premiums because of a pre-existing condition. The AHCA would allow states to apply for a waiver to current law to allow insurance companies charge higher insurance premiums because a person has a pre-existing health condition like heart disease, autism, or traumatic brain injury. Before the ACA, 43 states and the District of Columbia allowed insurance companies to charge higher premiums to people with pre-existing conditions. This provision of the AHCA would have disastrous consequences for the millions of Americans with preexisting conditions, including veterans.
The Republicans rejected all of the Democratic amendments that would have nominally improved the flawed Republican health care bill. The Johnson bill does not fix any of the underlying flaws that would cause veterans to lose coverage or pay higher out-of-pocket costs. There are numerous actions Congress could take to improve health care for veterans. Enacting a technical fix for a bill that isn’t even law yet doesn’t pass muster as being a legitimate effort to improve care and coverage for America’s veterans. For these reasons, we oppose H.R. 2372.
Richard E. Neal,
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