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Republicans Add Penalty Policy To Health Care Bill

by Kelly Tunney
Zach Gibson/Getty Images News/Getty Images

Ahead of the Senate's possible vote later this week for a bill to repeal and replace Obamacare, on Monday Republicans released an updated version of the Better Care Reconciliation Act, which introduces a penalty for individuals who let their coverage lapse.

According to the new version of the bill, if someone tries to sign up for health care coverage and they had a lapse in coverage of more than 63 days the previous year, the person would be barred from insurance coverage for six months. This would supposedly incentivize people to buy into coverage so they would not risk being barred from insurance for an extended period if they were to become sick. According to Vox, people undergoing the waiting period would not be charged premiums during that time.

This policy replaces the individual mandate of the Affordable Care Act, which charged people a penalty on their following-year tax return for not being covered for more than two months. According to Business Insider, in the House version of the bill, known as the American Health Care Act, which was passed in May, people who let their coverage lapse could face 30 percent premiums for coverage as a penalty.

Incentives give people a reason to get covered even when they're not sick, and they pay into the pool of funds available to help lower costs for everyone. The original draft of the Better Care Reconciliation Act did not include any coverage-lapse penalties or incentives. Some feared the lack of continuous coverage provision would lead to a "death spiral."

Senate Republicans released their version of the bill on June 22, and are expected to take it to a vote sometime this week. In the meantime, the bill may undergo more tweaks or revisions in order to ensure that enough Republican senators will vote for it. Republicans need at least 50 votes to pass the bill (if a tie were to occur, Vice President Mike Pence would be the tie-breaking vote, and he would likely vote in favor of it), so with 52 Republicans in the Senate and no Democrats expected to vote for the bill, they can only afford to lose three votes.

Since the release of the bill's draft last week, five Republican senators have spoken out against the BCRA. Ted Cruz, Ron Johnson, Rand Paul, and Mike Lee said that the bill did not go far enough to repeal Obamacare. However, they did say that they were open to negotiating. Sen. Dean Heller has also opposed the bill.

The Congressional Budget Office released its analysis of the bill Monday afternoon, determining that 22 million Americans could lose insurance from the BCRA by 2026. Senators may consider that when they vote.