House Republicans Unveil Long-Awaited Replacement for Health Law

By ROBERT PEAR
JUNE 22, 2016 - The New York Times

WASHINGTON — After six years of vague talk about a conservative alternative to the Affordable Care Act, House Republicans on Tuesday finally laid out the replacement for a repealed health law — a package of proposals that they said would slow the growth of health spending and relax federal rules for health insurance.

Opponents began the “repeal and replace” mantra almost as soon as the Affordable Care Act was signed in 2010, and while they have voted dozens of times to repeal the health law, the replacement has been elusive.

In finally presenting one, Speaker Paul D. Ryan of Wisconsin and his Republican team did not provide a cost estimate or legislative language. But they did issue a 20,000-word plan that provides the most extensive description of their health care alternative to date.

Many of the ideas — for “health savings accounts,” “high-risk pools” and sales of insurance across state lines — are familiar. Democrats in and out of Congress have for weeks been rehearsing their lines of attack.

Others are sure to be contentious. House Republicans would gradually increase the eligibility age for Medicare, which is now 65. Starting in 2020, the Medicare age would rise along with the eligibility age for full Social Security benefits, eventually reaching 67.

Following Mr. Ryan’s budget plans of recent years, the health proposal would transform Medicare into “a fully competitive market-based model known as premium support.” The traditional fee-for-service Medicare program would compete directly with private plans offered by companies like UnitedHealth, Aetna and Humana.

In their blueprint, to be formally unveiled on Wednesday, House Republicans say they would eliminate the requirement that most Americans carry health insurance. They would offer a flat tax credit to each person or family in the individual insurance market, regardless of income or the premium for a particular insurance policy.

House Republicans also said they would roll back the Affordable Care Act’s expansion of Medicaid and give each state a fixed amount of money for each beneficiary or a lump sum of federal money for all of a state’s Medicaid program.

In addition, House Republicans would allow states to establish work requirements for able-bodied adults on Medicaid, requirements that the Obama administration has refused to permit. Under the House Republican plan, states could also “charge reasonable enforceable premiums or offer a limited benefit package” and use “waiting lists and enrollment caps” for certain groups of Medicaid beneficiaries.

Using these options and others proposed by House Republicans, states could profoundly reshape the Medicaid program, which provides health insurance to more than 70 million people at a federal cost of more than $350 billion a year.

“Reforming Medicaid’s financing with a per-capita allotment certainly will reduce federal spending, but just as importantly” will give states more control over the program and more incentives to manage care and costs, the blueprint says.

The health care package is one of a half-dozen planks in the platform that Mr. Ryan describes as “a better way.” It is more substantive than anything offered to date by Donald J. Trump, the presumptive Republican presidential nominee, and provides a possible framework for Republican action in 2017.

Democrats say the package would reverse progress made in reducing the number of uninsured.

One of the most important provisions of the 2010 health care law stipulates that insurers cannot deny coverage or charge high premiums because of a person’s medical condition or history. The House Republican blueprint would replace this guarantee with more complicated, less stringent standards.

No American could be denied coverage because of a pre-existing condition, the House Republican plan says. But the protection against higher premiums would apply only to people who maintain “continuous coverage.” If a consumer allows a significant break in coverage, insurers could charge more than “standard rates” and take a person’s health status into account in setting premiums.

The House Republican plan would also change the tax treatment of some employer-provided health insurance, in a way that some employers are finding objectionable.

Under current law, employees do not have to pay federal income tax on contributions that employers make to their health insurance. House Republicans said this open-ended subsidy had encouraged people to select more expensive coverage, driving up premiums.

“To help lower the cost of coverage,” House Republicans said, they would cap the value of tax-free benefits, but the cap would be so high that it would affect “only the most generous plans.”

The Affordable Care Act tries to discourage inefficient insurance plans as well, through a “Cadillac tax” on high-cost employer-sponsored coverage, a tax that was recently delayed until 2020.

Republicans say their approach is better, but employers were quick to denounce the proposal.

“This would be a new tax on benefits, on working families, and could eventually threaten the employer-sponsored health insurance that so many Americans enjoy,” said James P. Gelfand, senior vice president of the Erisa Industry Committee, a trade association for large employers.

House Republicans would relax age-rating restrictions in the Affordable Care Act. Under the law, insurers generally cannot charge older Americans more than three times what they charge younger people, other factors being equal. Republicans said this was “an unrealistic regulation” that led to “higher premiums for millions of Americans, especially younger and healthier patients.”

House Republicans would allow a ratio of five to one, with states permitted to set more or less restrictive rules.