House Republicans Release Long-Awaited Obamacare Replacement Bill

by | March 7, 2017

By Tony Pugh and Alex Daugherty

After months of negotiations, House Republicans unveiled their long-awaited legislation to repeal and replace the Affordable Care Act amid concerns the bill would weaken or erase many of the health law's signature consumer protections.

The bill would replace Obamacare's income-based subsidies with tax credits based more heavily on age, wipe out the individual mandate, cut federal funding for local public health programs, bar Planned Parenthood from receiving federal money and phase out enhanced funding for newly eligible Medicaid recipients.

The House Energy and Commerce Committee and the Ways and Means Committee are expected to move quickly, taking up the measure at hearings on Wednesday, which would then set the stage for the proposals to be merged into a final bill next week by the House Budget Committee.

The Republican legislation hasn't been scored by the Congressional Budget Office for its cost and impact. But most experts expect fewer people to get coverage under the GOP plan than under Obama's Affordable Care Act.

"The House plan includes tax cuts that (the) CBO previously estimated would cost about $600 billion over 10 years," said Aviva Aron-Dine, a senior fellow at the Center for Budget and Policy Priorities who served as senior counselor to former Health and Human Services Secretary Sylvia Burwell. Those tax cuts go mostly to higher income people and large corporations, Aron-Dine said.

Proposed cuts to Medicaid in the GOP bill would finance those tax cuts, she said. "We know that the only way this bill's math can add up is for Medicaid to foot the bill for those hundreds of billions in tax cuts," Aron-Dine said in an evening conference call with reporters.

Senate Republicans are hoping to vote on the measure before the end of March, but four Republican senators _ Rob Portman of Ohio, Shelley Moore Capito of West Virginia, Cory Gardner or Colorado and Lisa Murkowski of Alaska _ told Senate Majority Leader Mitch McConnell on Monday that previous House drafts did not provide enough support for newly eligible Medicaid enrollees who gained coverage under the Affordable Care Act's Medicaid expansion.

If those four Republicans withhold support for the proposal, the bill would have a tough time getting the 60 votes needed for passage.

Under the ACA, federal subsidies, or tax credits, help more than 80 percent of marketplace enrollees purchase health insurance. The amount of the tax credit is based on income and the cost of coverage, but generally, the lower the income, the higher the tax credit. People who earn more than four times the poverty rate don't even qualify for tax credits under the ACA. They must pay the full cost of coverage.

Republicans would offer a similar tax credit to all who purchase individual insurance. The GOP flat-tax plan would be based on age and income and would be adjusted annually for inflation.

The bill also would continue the ACA's requirement that insurers provide access to coverage for all, even those with pre-existing medical conditions. But insurers could charge 30 percent more for coverage to plan members who've let their insurance lapse.

The proposal would also allow insurers to charge older plan members five times more than younger members who typically have much lower medical costs. Under the Affordable Care Act, older enrollees can only be charged three times more than younger plan members.

A study commissioned by the AARP found that premiums for people in their 60s would jump an average of 22 percent, or $3,192 per year, under the proposed change. People in their 50s would pay an average of 13 percent more, about $1,524 per year, the study found.

Upon releasing the bill, House Energy and Commerce Committee Chairman Greg Walden, R-Ore., said the legislation represents an important step in making good on Republican efforts to repeal the Affordable Care Act.

"We've spent the last eight years listening to folks across this country, and today we're proud to put forth a plan that reflects eight years' worth of those conversations with families, patients and doctors," Walden said in a statement. "We are moving forward united in our efforts to rescue the American people from the mess Obamacare has created."

Rep. Justin Amash, R-Mich., a member of the conservative Freedom Caucus, derided the bill on social media minutes after it was introduced. He referred to it as Obamacare 2.0.

Rep. Mark Meadows, R-N.C., chairman of the Freedom Caucus, didn't comment on the plan after its release _ though a Meadows aide said he still has concerns.

Polls increasingly showed in recent weeks that Obamacare has grown in popularity. A McClatchy-Marist poll in February found little support for repealing Obamacare. Fifty-eight percent of Americans either wanted the Affordable Care Act to remain a law or to change it so that it does more, the poll found.

GOP lawmakers wanted the tax credits to go to all who purchase individual insurance, both on and outside the insurance marketplace. But faced with concerns that the plan would provide an entitlement to the wealthy, Republicans have proposed reducing the tax credit for individuals who earn more than $75,000 and for joint income filers who earn more than $150,000.

Those earning above that amount would see their tax credit decline by $100 for each $1,000 in income, according to GOP staffers.

Plan members in their 20s would get tax credits in the $2,000 range. Those in their 30s would get roughly $2,500 and people in their 40s would get roughly $3,000. People in their 50s would receive tax credits of about $3,500 and those over 60 would get roughly $4,000.

Most of the proposal comes as advertised: It calls for ending income-based federal subsidies to help purchase marketplace coverage and would wipe out all taxes that helped pay for the subsidies.

The proposal also would end the individual mandate that requires all Americans to have health coverage, and would end the employer mandate that requires certain employers to provide health insurance benefits. It also would phase out federal funding for newly eligible Medicaid-expansion enrollees and would provide more money for states to cover people with costly medical conditions through high-risk pools.

Critics say the measure would also restrict women's access to health care by withholding federal funding for groups that perform abortions, including Planned Parenthood.

The legislation would also eliminate funding beginning in 2019 for the Prevention and Public Health Fund, which provides grants to state and local health departments through the Centers for Disease Control and Prevention.

The GOP proposal also calls for repealing the ACA's Medicaid expansion. It would allow states that expanded Medicaid a limited time period to continue the enhanced federal funding for their newly eligible recipients _ no less than 90 percent of their medical costs.

Eventually, those enrollees would be funded at the basic Medicaid level, forcing states to bear more of their costs or to limit their eligibility for Medicaid.

The bill would also change Medicaid's funding formula to a per capita cap system.

Currently, the federal government pays a share of each state's Medicaid spending _ anywhere from 50 percent to 80 percent _ with no limit on total costs.

A "per capita cap" provides funds for each Medicaid beneficiary in certain groups _ such as pregnant mothers, the disabled and children _ up to a specified amount. Doing so would end Medicaid's guarantee of coverage for all who qualify and would require restructuring program eligibility and coverage rules.

Changing the Medicaid funding formula "ends the Medicaid program as we know it," said Aron-Dine of the Center for Budget and Policy Priorities.

Medicaid funding now grows with need, but under per capita caps, "states would be left on their own to deal with higher than expected costs from a public health emergency like opioids or Zika (or) from a spike in prescription drug prices or from enrollees with higher-than-expected health needs," Aron-Dine said.

In a statement, Bruce Siegel, president and CEO of America's Essential Hospitals, which provide care to a large share of low-income patients, said the group was "particularly disappointed" about the lack of Congressional Budget Office analysis to determine the impact of terminating the Medicaid expansion and shifting Medicaid's funding formula to the per capita caps.

"These changes alone could result in deep funding cuts for essential hospitals, which now operate with little or no margin," Siegel said. "Our hospitals could not sustain such reductions without scaling back services or eliminating jobs."

Without knowing the impact, he said, "there are too many unknowns and too great a risk of coverage losses without affordable alternatives for many Americans."

The Republican bill would also resurrect high-risk pools to provide coverage for hard-to-ensure plan members.

In 35 states, 226,000 people who were unable to get private insurance in the days before Obamacare found coverage through state high-risk pools, a safety-net program for the medically uninsurable.

Under Obamacare, premiums for sicker, costlier consumers are supposed to be held down because they're part of a pool of covered individuals that includes healthier people.

The GOP plan would put these higher-cost enrollees into state-run high-risk pools so private insurers could charge lower premiums for everyone else. The GOP proposal would provide $100 billion for the risk pools over 10 years. The measure would also allow states to use the risk pool funding to provide more financial support for low-income enrollees who might not be able to afford coverage even with the flat-tax credit.

The plan would retain the ACA's list of essential benefits that all policies must cover. But it would end the ACA's coverage "metal tiers" that rate the quality of coverage through Bronze, Silver, Gold and Platinum plans. Instead, states will set their own guidelines for determining the quality of coverage.

Democrats slammed the secretive nature of the bill's beginnings as well as its contents.

"The Republican repeal bill would rip health care away from millions of Americans, ration care for working families and seniors, and put insurance companies back in charge of health care decisions _ contrary to everything President Trump has said he would do with his health care plan," said Democratic Reps. Frank Pallone of New Jersey and Richard Neal of Massachusetts in a joint statement after the bill was made public. Pallone and Neal are the ranking members of the two committees that will mark up the bill on Wednesday.

At the White House, spokesman Sean Spicer called the Affordable Care Act "a disaster" and said the Republican bill is a "step toward restoring health care choices and affordability back to the American people."

"President Trump looks forward to working with both chambers of Congress to repeal and replace Obamacare."

(c)2017 McClatchy Washington Bureau