GOP leaders could present ACA repeal plan this week
By Harris Meyer
February 24, 2017 - Modern Healthcare
A leaked draft
of the House Republican bill to repeal the Affordable Care Act would end the
Medicaid expansion by 2020, spend a much larger than expected amount of money on
state high-risk pools, and create premium tax credits offering 60-year-olds just
twice as much as 30-year-olds.
The bill would convert Medicaid from an
open-ended entitlement program to a program of capped federal contributions to
the states based on the number of people enrolled, with payments rising by a
fixed percentage regardless of medical cost growth.
In addition, it
would repeal all the ACA's taxes that finance the law's premium subsidies,
Medicaid expansion, and Medicare benefit enhancements. In their place, the bill
would establish a new tax on employees for the value of generous employer health
benefits. It would hit plans at and above the 90th percentile of current
premiums. That idea is deeply unpopular with business groups and labor
unions.
The gdiscussion
draft,h dated Feb. 10 and obtained by Politico, is certain to draw criticism
from both Republicans and Democrats. House Speaker Paul Ryan has said he wants
to present an ACA repeal bill as early as next week and pass it through the
expedited budget reconciliation process on a straight party-line vote before the
Easter recess in early April. But he almost certainly will face strong
objections from Democrats, state elected officials, healthcare industry groups,
patient and consumer groups, and conservatives in his own party.
The
draft likely is undergoing changes. That may be because insiders say the
Congressional Budget Office has scored the bill as causing large increases in
the nation's uninsured rate, which would rattle more moderate congressional
Republicans who are nervous about causing millions of people to lose
coverage.
Starting in 2020, the House bill would establish refundable
premium tax credits based on age, unlike the ACA's income-based credits. People
under 30 would receive $2,000, while people over 60 would get $4,000. Both
low-income and high-income people would get the same amount.
The bill
would eliminate the ACA's minimum essential benefit package and leave it up to
each state to regulate benefit levels.
Experts said that while that level
of tax credit might be large enough to cover the premium of a comprehensive
health plan for a 30-year-old, it probably wouldn't be enough to cover the
premium for a 60-year-old.
A differential of 2-1 in credits for older
and younger people seems inconsistent with the push by insurers to increase the
permitted premium differential based on age to 5-1, up from the 3-1 differential
allowed by the ACA. Insurers say older people have medical costs that are at
least five times as great as younger people.
gThe credit in the House
Republican bill would be plenty adequate at age 30 but pretty inadequate above
age 60, particularly for people with lower incomes,h said John Holahan, a health
services researcher at the Urban Institute. gI'm not sure why they picked those
numbers.h
To address the issue of covering people with costly
pre-existing medical conditions, the House bill would offer states $100 billion
in gstate innovation grantsh over nine years to set up high-risk pools and other
mechanisms for insuring such folks.
That's much more than the $25
billion House Republican leaders proposed last year in their Better Way white
paper. But it still might not be enough to provide solid, affordable coverage to
those with pre-existing conditions, given that previous
estimates have pegged the annual public cost of running adequate high-risk
pools at $15 billion to $25 billion a year.
gOver 10 years, a reasonably
good high-risk pool would cost more than that,h Holahan said. gAnd is that $100
billion a one-time thing to help the states set up the pools, and then states
are on the hook? We don't know. We need more details on how this will be
structured.h
The bill would replace the ACA's tax penalty for not buying
insurance with a 30%, one-year premium penalty on people who apply for insurance
after letting their coverage drop. It's not clear insurers will consider that a
strong enough incentive to pressure younger, healthier people to buy insurance,
offsetting the costs of older, sicker enrollees.
One of the most
politically explosive features of the legislation is the conversion of Medicaid
into a capped federal contribution model.
gA per capita cap would result
in huge losses of funds to states that will cause people to get fewer benefits,
force beneficiaries to pay more out of pocket, and significantly reduce payments
to providers, thereby causing many providers to shun serving beneficiaries,h
said Ron Pollack, executive director of the pro-ACA advocacy group Families
USA.
gThe Senate won't swallow the Medicaid cuts,h said Tom Miller, a
conservative health policy expert at the American Enterprise
Institute.
Healthcare industry groups undoubtedly will demand many more
details about the legislation before taking a position on it. Congressional
Republicans repeatedly have promised that they would use an open and inclusive
process, with plenty of hearings and opportunities for input, before passing ACA
repeal-and-replace legislation. Their process, they have said, will contrast
sharply with the way Democrats passed the ACA.
But experts say it will
be nearly impossible to have a full debate on the Republican bill if GOP leaders
stick to the lightning timetable they've laid out.
gIt's a legitimate
point, how transparent will this be,h said Chris Condeluci, a Republican
lobbyist who served as a Senate GOP staffer during the passage of the ACA. gIt's
not that people don't know what will be included. But will they go through the
regular order of hearings? No.h
Adding to the Republicans' headaches, a
new Kaiser Family
Foundation survey found that more Americans now view the ACA favorably than
unfavorably, 48% to 42%.
In addition, the vast majority (84%) say it is
either gveryh or gsomewhath important for any replacement plan to ensure that
states that received federal funds to expand Medicaid continue to receive those
funds. On top of that, 66% prefer to keep the current financing structure of
Medicaid, compared with 31% who favor the per-capita approach.