House Republicans release long-awaited plan to repeal and replace Obamacare
By Amy Goldstein, Mike DeBonis and Kelsey Snell
March 6 at 7:17 PM - The Washington Post
House Republicans on Monday released long-anticipated legislation to supplant
the Affordable Care Act with a more conservative vision for the nationfs
health-care system, replacing federal insurance subsidies with a new form of
individual tax credits and grants to help states shape their own policies.
Under two bills drafted by separate House committees, the government would no
longer penalize Americans for failing to have health insurance but would try to
encourage people to maintain coverage by allowing insurers to impose a surcharge
of 30 percent for those who have a gap between health plans.
The legislation would preserve two of the most popular features of the 2010
health-care law, letting young adults stay on their parentsf health plans until
age 26 and forbidding insurers to deny coverage or charge more to people with
preexisting medical problems. It would also target Planned Parenthood, rendering
the womenfs health organization ineligible for Medicaid reimbursements or
federal family planning grants — a key priority for antiabortion groups.
The debate, starting in House committees this week, is a remarkable moment in
government health-care policymaking. The Affordable Care Act, former president
Barack Obamafs signature domestic policy achievement passed in 2010 with only
Democratic support, ushered in the most significant expansion of insurance
coverage since the creation of Medicare and Medicaid as part of President Lyndon
Johnsonfs Great Society programs of the mid-1960s.
There is no precedent for Congress to reverse a major program of social
benefits once it has taken effect and reached millions of Americans.
Taken together, the bills introduced Monday night represent the Republicansf
first attempt — and best shot to date, with an ally in the White House — to
translate seven years of talking points about demolishing the ACA into
action.
At the same time, major aspects of the plans, notably the strategy for tax
credits and Medicaid, reflect the treacherous terrain that Republicans face to
win enough votes within their own conferences in the GOP-controlled House and
Senate.
The bills must address concerns of both conservatives worried about the cost
of the overhaul and worries that it might in effect enshrine a new federal
entitlement, as well as more moderate members who want to ensure that their
constituents retain access to affordable health care, including those who
received Medicaid coverage under the ACA.
Even so, signs emerged on Monday that Republicans in Congressfs upper chamber
could balk either at the cost of the proposal or if it leaves swaths of the
country without insurance coverage.
Sen. Rand Paul (R-Ky.) one of at least three conservative senators who
opposes the plan to provide income-based tax credits, tweeted: gStill have not
seen an official version of the House Obamacare replacement bill, but from media
reports this sure looks like Obamacare Lite!h
And four key Republican senators, all from states that opted to expand
Medicaid under the ACA, said they would oppose any new plan that would leave
millions of Americans uninsured.
gWe will not support a plan that does not include stability for Medicaid
expansion populations or flexibility for states,h Sens. Rob Portman (Ohio),
Shelley Moore Capito (W.Va.), Cory Gardner (Colo.) and Lisa Murkowski (Alaska)
wrote in a letter to Senate Majority Leader Mitch McConnell (R-Ky.).
The four senators were split on exactly what proposals would meet their
standards, but with 52 Republicans, McConnell would not have enough votes to
pass repeal without the support of at least two of them.
Democrats, meanwhile, have given no indication that they intend to work with
Republicans, and top party leaders decried the GOP plan Monday as a betrayal of
everyday Americans. gTrumpcare doesnft replace the Affordable Care Act, it
forces millions of Americans to pay more for less care,h said Senate Minority
Leader Charles E. Schumer (D-N.Y.).
In particular, the plan to target Planned Parenthood has already generated
fierce pushback from Democrats and doubts from some Republicans who have noted
that federal funds are already barred from funding abortions and that Planned
Parenthood provides routine medical care to millions of American women.
The tax credits outlined by the Ways and Means Committeefs portion of the
legislation incorporate an approach that Republicans have long criticized:
income-based aid to help Americans afford health coverage.
Until now, the GOP had been intending to veer away from the ACA subsidies
that help poor and middle-class people obtain insurance, insisting that the size
of tax credits with which they planned to replace the subsidies should be based
entirely on peoplefs ages and not their incomes. But the drafts issued Monday
proposed refundable tax credits that would hinge on earnings as well as age —
providing bigger credits for older and poorer Americans.
This big pivot, developed by the Ways and Means Committee under the guidance
of House Speaker Paul D. Ryan (R-Wis.), stems from a combination of problems
that were arising with the idea of age-only credits that would have been
available to any individual or family buying insurance on their own, no matter
how affluent.
The Republican plan would offer tax credits ranging from $2,000 per year for
those under 30 to $4,000 per year for those over 60. The full credit would be
available for individuals earning up to $75,000 a year and up to $150,000 for
married couples filing jointly. The credits would phase out for individuals
earning more — for each $1,000 in additional income, a person would be entitled
to $100 less in credit, meaning a 61-year old could make up to $115,100 and
still receive some credit.
The income-based phaseout of the credit allows the GOP plan to be funded
without taxes on employer-provided insurance that had been considered earlier in
the drafting process. In addition, the latest proposal would delay the ACAfs
gCadillach tax, a levy on the most generous employer-provided health plans,
until 2025. It also retains the tax exclusion for premiums paid for
employer-provided health plans.
Estimates from congressional budget analysts and the White Housefs Office of
Management and Budget kept showing that the credits would be both too small to
provide enough help to lower-income people and too expensive overall for a GOP
determined to slash federal spending that the ACA has required.
Those analysts have not had time to assess how this new configuration would
affect federal spending or the number of people with insurance coverage.
While the number of Americans who can afford health insurance has never been
the priority for the GOP that it is for Democrats, President Trump has made
clear that he is sensitive to any changes that would strand large numbers of
people who gained coverage under the ACA.
Compared with the ACAfs subsidies, the tax credits would go to more people
but provide less financial help to lower-income people, according to Larry
Levitt, senior vice president of the Kaiser Family Foundation.
Meanwhile, the portion of the legislation drafted by the Energy and Commerce
Committee would substantially redesign Medicaid in a way that attempts to
balance the GOPfs antipathy toward the ACAfs expansion of the program against
the concerns of a significant cadre of Republican governors — and the lawmakers
from their states — who fear losing millions of dollars that the law has
funneled to help insure low-income residents.
Medicaid would be converted from its current form of
entitlement to anyone eligible into a per capita cap on funding to states,
depending on how many people they had enrolled. In states that expanded Medicaid
under the ACA, the government for now would continue paying for virtually the
entire cost of the expansion.
Thirty-one states, plus the District of Columbia, have adopted that
expansion. Starting in 2020, however, the GOP plan would restrict the
governmentfs generous Medicaid payment — 90 percent of the cost of covering
people in the expansion group — only to people who were in the program as of
then. States would keep getting that amount of federal help for each of those
people as long as they remained eligible, with the idea that most people on
Medicaid drop off after a few years.
For the other 19 states that did not expand Medicaid, the legislation would
provide $10 billion spread over five years. States could use that money to
subsidize hospitals and other providers of care that treat many poor
patients.
While members of the two committees working on the
replacement drafts were determined to begin considering legislation this week,
final work on them was still underway over the weekend and Monday, according to
three individuals with knowledge of the process.
The change in thinking about tax credits emerged since
Friday, when a White House meeting chaired by Budget Director Mick Mulvaney and
attended by key GOP congressional figures was called to finalize key provisions.
At the same time, the shift to take income into account could create a
potentially difficult ripple effect for Republicans, who regard a reduction in
the federal governmentfs role in health care as a central reason to abandon the
sprawling 2010 health care law. One motivation for the GOP thinking that credits
could depend only on age was that the Internal Revenue Service would no longer
have needed to verify the eligibility of people for financial help, as it has
for ACA subsidies. If income is taken into account, the IRS would still need to
be involved.
Coming out of a closed-door GOP conference meeting last week, several House
Republicans expressed concerns that the committees might start to work on the
legislation without a complete fiscal assessment. To be eligible for special
budget rules known as greconciliationh — allowing bills to pass in the Senate by
a simple majority — the legislation cannot increase the deficit after its first
10 years in effect.
Several House GOP aides involved in the drafting of the legislation could not
say when the Congressional Budget Office would provide its formal analysis of
the bill, but the two committees of jurisdiction are poised to advance the bill
without it. One said committees gregularly go through the markup process without
a formal CBO score.h
But House Minority Leader Nancy Pelosi (D-Calif.) said Monday that
Republicans should not move the legislation through committees without the CBO
analysis: gThe American people deserve to see what Republicans are trying to do
to their health care.h