Senate Republican Bill Replaces Obamacare Mandate With ‘Coverage Requirement’

By Terence P. Jeffrey | July 17, 2017 | 6:00 PM EDT

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(CNSNews.com) - The new plan to "repeal and replace" Obamacare that the Senate Republican leadership released last week would replace Obamacare’s requirement that individuals buy health insurance or face a tax penalty with a requirement that individuals buy health insurance or face a six-month government-mandated ban on their ability to buy health insurance.

The relevant element in the Obamacare law was entitled “Requirement to Maintain Minimum Essential Coverage.” The relevant element in the Senate Republicans’ bill is entitled “Creditable Coverage Requirement.”

Obamacare’s “Requirement to Maintain Minimum Essential Coverage” was challenged in the Supreme Court on the grounds that Congress did not have the constitutional authority to force people to buy health insurance.

The court ruled that the Commerce Clause (which gives Congress the power “to regulate commerce…among the several states”) does not give Congress the power to force people into commerce by requiring them to buy insurance.

But the court also ruled that the “penalty” Obamacare imposed on people for not buying insurance could be justified under Congress’s taxing power.

So, the Supreme Court allowed Obamacare’s individual mandate to stand on the grounds that it was not really a mandate but a tax people could opt out of if they chose to buy health insurance instead.

The draft of the “Better Care Act” released by Senate Republicans last week reduces that tax penalty for not buying insurance to "zero percent.”

But another part of the Better Care Act--Section 206—imposes what it calls “Enrollment Waiting Periods” on people who fail to meet the “Creditable Coverage Requirement.”

A summary of the bill published by the Senate Budget Committee says this provision mandates that insurance companies deny coverage to anyone who has had a 63-day-or-longer gap in their insurance in the previous year.

The summary says:

“Under the new paragraph, issuers offering plans in the individual market on or after January 1, 2019, would be required to impose a 6 month waiting period on individuals who had a gap in creditable coverage; creditable coverage has the meaning given to the terms as currently defined in PHSA Section 2704(c)(1), and includes membership in a health care sharing ministry, as defined in IRC Section 5000A(d)(2)(B).

“For an individual submitting an insurance application during an OEP [open enrollment period], a significant break in coverage (a period of 63 days or longer) within a 12-month period would constitute a gap. For an individual submitting an application during an SEP (special enrollment period), a gap consists of either a significant break in coverage within a 12-month period or no creditable coverage during the 60 days prior to submitting such application.”

The Senate Republican proposal would allow some exceptions to this rule, including for newborn babies and adopted children.

But the exception for newborn babies and adopted children would only be applicable if their parents insured them within 30 days of their birth or adoption.

The language in the Senate Republican bill says:

“Exceptions. Notwithstanding subparagraph (A), a health insurance issuer may not impose a waiting period with respect to the following individuals: (i) a newborn who is enrolled in such coverage within 30 days of the date of birth. (ii) A child who is adopted or placed for adoption before attaining 18 years of age and who is enrolled in such coverage within 30 days of the date of the adoption. (iii) Other individuals, as the Secretary determines appropriate.”

The American Health Care Act, the Obamacare repeal and replace bill that the Republican-controlled House passed in May, includes a similar provision to the Senate bill’s “Creditable Coverage Requirement.”

It requires insurance companies to impose a 30-percent surcharge on the premiums paid for one year by an individual who seeks to buy insurance after failing to buy insurance for a 63-day period in the previous year.

Obamacare told Americans: Buy insurance now or pay a tax penalty. The Republican House plan to repeal and replace Obamacare would tell Americans: Buy insurance now or pay 30 percent more in premiums for a year when you do buy insurance.  The Republican Senate plan would tell Americans: Buy insurance now or you will be denied coverage for six months when you do buy insurance.