- The text of the long-awaited Republican bill to repeal and replace the Affordable Care Act (ACA) was released Monday evening and included tax credits to help people buy coverage based somewhat on income, instead of just on age as previous drafts obtained by Politico had suggested.
- It also eliminates the cap on employer-sponsored health insurance tax breaks, which had been in previous draft bills. The Cadillac tax on high-end plans would remain but be further delayed until 2025.
- Medicaid would be turned into a block grant program with a per capita cap for each state. States that expanded Medicaid eligibility under the ACA would be forced to freeze extra enrollment and beneficiaries already enrolled could stay on until 2020.
After several reports on leaked ACA replacement bills, this bill offers patients, care providers and health insurers the first concrete understanding of what members of Congress are likely vote on. But it will be at least weeks before a bill is approved or rejected, as was the case for the ACA.
The bottom line is that the bill would mean an end to the record low rates of uninsured, as well as the scaling back of key protections for people with pre-existing conditions and provisions that help people obtain preventive care services.
It will favor those who are healthy and receive a high income substantially over those with lower incomes and who need frequent health services.
Democrats were quick to denounce the bill, which was drafted mostly in secret despite the leaked drafts.
The ranking members of two key House committees, Frank Pallone (D-NJ) of Energy and Commerce and Richard Neal (D-MA) of Ways and Means, said the bill would "put insurance companies back in charge of healthcare decisions – contrary to everything President Trump has said he would do with his healthcare plan.”
The bill reveals a few key aspects of the evolution of the Republicans’ years-long effort to repeal the ACA.
One is that the large and often angry crowds of constituents who showed up at town halls across the country had some tempering effect on lawmakers determined to dismantle the law, but made for few ultimate changes in the repeal bill.
The nearly 70-page bill titled the American Health Care Act (AHCA) will be simultaneously marked up in two House committees Wednesday morning.
The massive changes to the Medicaid program will face significant opposition -- and not just from Democrats. A handful of Republicans in Congress who represent states that have had success with expanding Medicaid have indicated they would be hesitant to support a bill that eliminates expansion.
Hardline conservatives such as Rep. Justin Amash (R-MI) of the House Freedom Caucus may also be an obstacle. Several spoke out against earlier drafts because they deemed the tax credits as too generous. A memo from the Republicans Study Committee states the credits amount to “Republicans welfare entitlement.”
Obamacare 2.0 https://t.co/p0zKkMD3UT— Justin Amash (@justinamash) March 6, 2017
The ACHA does do away with expansion, but attempts to ease the transition by allowing those who have obtained coverage under expansion to remain in the program for a few years.
A key change from previous drafts is basing the tax credits on income — as the ACA did — in addition to age. This will provide a little help for those who have difficulty affording insurance but make too much to qualify for Medicaid.
One major remaining question is how the bill will be paid for now that the cap on tax breaks for employer-sponsored insurance has been removed. The employer-based tax cap was a political unpopular idea opposed by the business community. The bill continues the delay of the Cadillac tax on premium plans from 2020 to 2025.
The authors admit they are “still discussing details” on financing the bill.
The GOP is moving forward without a score from the Congressional Budget Office (CBO). This is a risky move, as some Republicans will likely be hesitant to sign on to a bill without a solid grasp on the numbers affected.
It’s not that surprising, however, after reports that the CBO told those working on the bill that its first drafts could mean taking coverage away for as many as 20 million people with employer-sponsored insurance.
Also unclear is how much guidance and support the bill will receive from the White House. President Donald Trump called the bill “wonderful” in a tweet but noted it is still being negotiated. Trump has been mostly silent on the policy details of ACA repeal-and-replace.
Another change from the ACA is how much more insurers could charge older adults than younger adults. That amount is currently limited to three times as much but the new legislation changes that to five times as much. A RAND Corporation study found that such a change to the age band rating would lower premiums for some younger adults but could increase premiums for a 64-year-old by as much as $2,000.
The bill also gives fewer protections for people with pre-existing conditions. Instead of the ACA’s complete ban on denying coverage for people with such conditions, the new bill would ban denying coverage only so long as patients maintain continuous coverage.
Penalizing patients for lack of continuous coverage could be beneficial for hospitals as this may mean that they will be less likely to drop their coverage. The penalty amount would be equal 30% of the premium rate.