Republican Policy Brief: Obamacare Repeal and Replace

Here is the policy brief released today by House and Senate Republicans on how to “repeal and replace Obamacare”, or the Affordable Care Act (ACA). The plan repeats the promises made by President Donald Trump and Republican Congressional leadership to achieve the following: “Lowers costs, expands access, improves quality, and puts patients and families in charge of their care, while protecting patients with pre-existing conditions and ensuring dependents up to age 26 can stay on their parents’ insurance.” It references House Speaker Paul Ryan “A Better Way” proposal rather than just-confirmed Health and Human Services Secretary Tom Price’s Empowering Patients First Act.

The plan concedes that millions of Americans need federal government support to make health care accessible and affordable, both through health insurance markets and the Medicaid program. While repealing the ACA’s premium and cost-sharing subsidies through federal tax credits, the plan creates a new national, refundable, federal tax credit  for all Americans, that increases with age. However, the plan fails to specify how much the credits will be, and whether they will be sufficient to make health insurance affordable. By de-linking such tax credits from income and from the actual cost of health insurance, it is likely that they, in fact, will be insufficient to make health insurance affordable for those who need it the most, i.e. low-income Americans, and those living in geographic areas where the cost-of-living, and the cost of health insurance, is higher.

The plan notes that this new tax credit will be paid for by repealing most of the ACA taxes (on health plans, medical devices, and prescription drugs) as well as the tax penalties on employers and individuals for not offering or purchasing insurance under the ACA.

The plan also expands the availability of tax-deductible health savings accounts (HSAs), which only are useful to individuals and families with higher incomes that have income to deduct. By nearly doubling the amount that could be deducted for such HSAs, the plan provides a massive tax cut to higher income Americans.

The plan also cynically repeals the expansion of Medicaid to all low-income Americans with double-speak language about giving control of Medicaid back to states. Repealing the Medicaid expansion means cutting off federal funding for the expansion of Medicaid in 31 states and the District of Columbia so that those states would have to fund health insurance coverage with state dollars, or cut off coverage for hundreds of thousands of residents in their states. The plan states that there will be a transition period before these federal funds are cut off but does not specify how long that will be.

The plan also allows states to reestablish high risk pools for those with pre-existing and chronic conditions that are the most expensive to insure; such high risk pools failed to provide affordable coverage when states offered them prior to the ACA. The plan does not specify what level of federal funding, if any, will be provided to support these multi-billion dollar high risk pools.

Then the plan goes far beyond “repealing” the ACA and includes a fundamental change to how Medicaid is funded, from a shared responsibility (and governing rules) between federal and state governments to either a “per capita allotment” (or cap) or block grant that will result in dramatic cuts in federal funding to the states, resulting in cost shifts to states, health providers, and Medicaid beneficiaries. Under the per capita cap, different levels of federal funding would be available for aged, blind and disabled, for children, and for adults but the amounts would be fixed based on the past number of beneficiaries rather than actual need. Since Medicaid is program subject to counter-cyclical economic forces, this always means that there will be less federal funding available when it is most needed, i.e. when the economy is in a downturn and there are more who are unemployed and uninsured.

States also will have the option of choosing a block grant funding formula for Medicaid rather than per capita caps, again based on the past level of funding. It is not clear whether that would include the funding for expanded Medicaid since the plan states that the block grant funding formula “would assume that states transition individuals currently enrolled in the Medicaid expansion out of the expansion population into other coverage”; it’s not clear what options states would have to cover the Medicaid expansion population without federal funding.

The one concession that seems to have been made to the 10 states with Republican governors that expanded Medicaid is the restoration of Disproportionate Share Hospital payments; under the ACA, these payments to hospitals for uncompensated care were reduced because Medicaid provided health insurance coverage for those formerly uninsured patients. While this restoration financially helps hospitals in those states, it doesn’t actually provide for health care for those who will be cut off for expanded Medicaid programs.

House Speaker Paul Ryan said today that legislation implementing this plan will be introduced next week, after Congress returns from a President’s Day long weekend.

Link to Original Source 

This entry was posted in Health Care Reform. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s