begin quote from:
WASHINGTON
― A draft version of a House Republican bill to repeal and “replace”
the Affordable Care Act shows how the move would weaken or eliminate
coverage for an untold number of people on Medicaid and private …
OLITICS
Leaked Bill Shows How House Republicans Would Dismantle Obamacare
More uninsured people, more exposure to medical costs — and a new tax on employer insurance.
X
WASHINGTON ― A draft version of a House Republican bill to repeal and “replace” the Affordable Care Act shows how the move would weaken or eliminate coverage for an untold number of people on Medicaid and private health insurance.
House Republicans, led by Speaker Paul Ryan
(R-Wis.), appear to be putting the finishing touches on the legislative
vehicle with which they intend to eliminate former President Barack Obama’s
signature health care law and put in place a new system ― one that
would provide significantly less funding for people seeking health
benefits and for states providing Medicaid coverage. Ryan has said that
he hopes the House can begin advancing legislation when it comes back
from recess next week.
The draft bill, first reported by Politico’s Paul Demko,
carries a Feb. 10 timestamp, and Republicans may have revised their
proposal since then. The text does not indicate which lawmakers or
committees are responsible for it, and there is a blank space where
normally the legislation would include the bill’s title.
But
the draft is consistent with the principles Ryan laid out in his “A
Better Way” agenda over the summer, and the basic shape of legislation
closely resembles a bill that Health and Human Services Secretary Tom
Price introduced when he served in the House.
Like
those proposals, the draft legislation would generally reduce financial
assistance for lower- and middle-income people buying private health
insurance. It would also weaken standards for what those plans cover,
roll back funding for the Medicaid expansion and create a new tax on
employer-provided health insurance.
Taxes
on wealthy people would fall, and the law’s controversial individual
mandate ― a penalty for people who don’t get coverage ― would go away
immediately, although most parts of the law with direct bearing on
insurance coverage would not take effect until 2020.
Without
a formal analysis from the Congressional Budget Office ― and without
careful study by outside experts, most of whom hadn’t seen the
legislation until Friday ― it’s difficult to say exactly how the law
might affect premiums, generosity of coverage, the federal budget or the
overall number of people with insurance.
Some people would clearly
feel better off. Young people, for instance, could buy cheaper insurance
― particularly if they were willing to get less comprehensive coverage
than the law currently requires.
But
the number of uninsured Americans, currently at a historic low thanks
to the 2010 law, would almost certainly rise if something like this
proposal became law. Combined with changes to insurance benefits, the
net result of the bill’s changes would likely be dramatically greater
exposure to punishing medical bills and reduced access to care ―
particularly for people who have serious health problems or who aren’t
entirely able to pay for comprehensive coverage on their own.
This may not be what most people thought when they heard President Donald Trump’s promise that “everybody’s going to be taken care of much better than they’re taken care of now.”
Of
course, with Republicans still deeply divided on how to proceed, this
proposal would be just an opening bid. Some conservatives in the House
and Senate don’t even want to replace the Affordable Care Act, while
another, larger faction objects to providing financial assistance at all
and has sneered at proposals that include tax credits, calling them
“Obamacare-lite.”
The
Senate, for its part, has made no apparent progress on health care
legislation and isn’t expected to simply accept what the House proposes.
The
Affordable Care Act’s Medicaid expansion poses more of a problem for
the repeal effort in the Senate, as well. Sen. Lisa Murkowski
(R-Alaska), for example, has already said she can’t support a bill that
would cut funding for her state’s Medicaid expansion, while
conservatives like Sen. Rand Paul (R-Ky.) say they won’t support a bill
that doesn’t end the expansion.
All
of this is taking place in a political environment increasingly hostile
for Republicans. Angry constituents are flooding lawmakers’ town halls
demanding more details about the “replacement” plan, while polling shows
a marked upswing in public approval for the Affordable Care Act and a
notable decline in support for repeal.
Here are some of the biggest changes that would take place if something like the House GOP draft bill were to become law:
Help paying for health insurance
Financial
assistance for people buying coverage would change dramatically.
Instead of tax credits that vary based on income, people would be
eligible for tax credits that vary based on age, with older customers
getting bigger credits.
This
would work out as a nice tax break for people whose incomes, today,
qualify them for only a little assistance or none at all. But it means
that working- and middle-class people would tend to lose assistance that
currently makes it possible for them to buy coverage in the first
place.
Critically,
the GOP proposal would also eliminate extra subsidies, available under
the Affordable Care Act, that reduce out-of-pocket expenses for people
whose incomes are below 250 percent of the poverty line, or about
$60,000 for a family of four.
Younger versus older people
The
Affordable Care Act doesn’t allow health insurance companies to charge
older people more than three times the price for a younger adult. The
House GOP plan would increase that limit to five times, although states
would have flexibility to set their own rules. This might mean lower
premiums for some younger consumers, but older people could pay
considerably more.
Health insurance benefits
Under
the Affordable Care Act, all private plans must cover a variety of
benefits, including hospitalizations, prescription drugs, contraception,
mental health and maternity. Under the House GOP bill, states would be
permitted to establish whatever “essential benefits” they wanted, and
leave out the rest.
The bill also includes a clause
that would allow insurers to continue offering “grandfathered” plans,
which are exempt from the Affordable Care Act’s standards for benefits
and pricing because insurers were selling them before the law took
effect. It’s not clear whether these plans would be available to people
not already enrolled in them. If they are, that could undermine other
regulations on insurance.
Pre-existing conditions and the individual mandate
Insurers
today cannot deny coverage or charge higher premiums because of health
status, as long as people sign up during annual open enrollment or
qualify for an exemption for a reason like a move or a new job. But
under this proposal, insurers could increase premiums by 30 percent, for
up to a year, on people who do not maintain “continuous coverage,”
meaning that they let their coverage lapse for more than two months.
This would have the biggest effect on lower-income people and people
juggling jobs ― particularly because, under the GOP proposal, they would
be getting less financial aid from the government.
The
proposal would also eliminate the individual mandate. The mandate
exists to make sure healthy people buy coverage, rather than waiting
until they get sick. The continuous coverage provision is supposed to
serve the same function, but many experts believe it is not as
effective.
Medicaid funding
House
Republicans propose repealing the Affordable Care Act’s Medicaid
expansion by eliminating the additional federal funding for it. The
federal government and states jointly finance Medicaid, and states
historically paid 25 percent to 50 percent of the costs, but the
Affordable Care Act provided at least 90 percent of the funding for the
expansion population. This draft bill would reduce it to the share paid
for other Medicaid beneficiaries.
The
bill also calls for a far more radical change to Medicaid. Since its
inception in 1965, Medicaid has been a federal entitlement like Medicare
and Social Security, so the government has been obligated to cover the
costs of any eligible person without limit. House Republicans want to
eliminate this entitlement status and instead send states a flat sum ―
known as a per-capita cap ― per enrollee.
This
would leave states on the hook for any costs above that amount, which
would be smaller than federal funding today. That would likely lead
states to remove people from the rolls, trim benefits and/or cut payment
rates to medical providers, reducing coverage and access to care.
High-risk pools
In an attempt to make up for
scrapping the Affordable Care Act’s guarantee of coverage for people
with pre-existing conditions, the House Republican bill would set aside
$100 billion over a decade to finance state programs that would cover
people with the highest medical costs.
This could take the form of
high-risk pools, which is a reform Republicans have long favored. Prior
to the ACA making them obsolete, these high-risk pools existed in a
majority of states, dating back to the 1970s. Inadequate funding, high
premiums and lengthy waiting lists meant only a tiny percentage of
people otherwise uninsurable had access to this coverage.
The
proposed $100 billion investment would be substantially more than what
previous proposals, such as Price’s, allocated. But even so, the
investment would probably fall far short of providing coverage for all
the people who need it. Both liberal and conservative health experts have speculated that high-risk pools really need more like $150 billion to $250 billion over that time period.
Paying for the plan
The
proposal would wipe out much of the Affordable Care Act’s funding,
including new payroll taxes that fall exclusively on the very wealthiest
Americans. To make up for some of that loss, the bill would start
subjecting a portion of the most generous health plans to taxes. Today
the premiums for employer-sponsored insurance do not count toward taxes,
so this would effectively be a new tax on the most expensive insurance
policies, which many middle-class people hold.
Economists
across the political spectrum have long called for such a change, and
the Affordable Care Act actually has a version of this proposal, known
as the “Cadillac tax.” But the idea of taxing health benefits is highly
unpopular, which is one reason Congress voted two years ago to postpone
introduction of the Cadillac tax.
* * *
One
question looming over all of this is how these features could become
law. In order to advance legislation in the Senate, where it would
normally take 60 votes to overcome a Democratic filibuster, Republicans
hope to use the budget reconciliation process, in which a simple
majority can pass a bill.
But
reconciliation rules prohibit consideration of changes that don’t
directly affect the federal budget, and some of the changes in the draft
bill ― like those affecting insurance regulations ― might not pass
muster with the Senate parliamentarian, an adviser to the Senate who interprets those rules.
Another
question is how long the transition to a new system would take. The
draft bill envisions full implementation by 2020, but that’s not
actually a lot of time for insurers to prepare for what would be an
entirely new insurance market. And with the individual mandate coming
off the books right away, insurers, who are right now making plans for
2018 and are already worried about covering their costs, might worry
about attracting enough healthy customers to make their policies
financially sound.
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