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GOP gives House members proposal to repeal, replace the ACA

  • Health
  • by Ana Radelat
  • February 16, 2017
  • View as "Clean Read" "Exit Clean Read"

Washington — To combat criticism that it doesn’t have a plan, GOP leaders on Thursday released a proposal at a meeting with Department of Health and Human Services Secretary Tom Price to repeal and replace the Affordable Care Act.

The proposal, which will be considered later this month in a series of hearings, includes replacement of the law’s subsidies that help people buy insurance with tax credits based on a person’s age, not income, and elimination of  federally mandated basic benefits in an insurance plan. The plan also would trim Medicaid money to many states, including Connecticut, encourage the establishment of health savings accounts and press states to establish new high-risk pools for those with pre-existing conditions.

The proposal does not have a timetable or detail the dollar amounts of subsidies to individuals or states. House Speaker Paul Ryan, R-Wis., said the Congressional Budget Office and the Joint Committee on Taxation are determining how much the various elements of the plan would cost.

The plan also would eliminate the requirement that individuals and certain businesses purchase insurance – even before a replacement for the ACA is put into place.

“To provide relief during the transition period, the penalty taxes for the individual mandate and the employer mandate are zeroed-out immediately,” the policy paper said.

Devised by GOP staff of the House Ways and Means Committee and the House Energy and Commerce Committee – two panels tasked with repealing and replacing the ACA – the plan also would cap the federal income tax exemption for the share of premiums individuals pay for employer-provided health insurance.

Instead of subsidizing premiums for low-and medium-income families and individuals who purchase health insurance in state exchanges like Access Health CT, the GOP plan would provide tax breaks to help low- and moderate-income people afford coverage.

The amount of the tax breaks would not be determined by income, but by age, with older Americans receiving a larger credit. If the tax break is larger than a person’s tax liability, the difference would be refundable to that individual by the IRS.

Some aspects of the plan, which is expected to be rejected by all Democrats, faced criticisms from conservative Republicans who fear the tax breaks to help individuals and families buy insurance would become a costly new entitlement program.

The GOP also is considering “advancing” the tax credit, much like the ACA does to help cut the cost of monthly insurance premiums

“Advanceability is a key feature…because many Americans need help paying their monthly premiums,” the policy paper says. “They cannot afford to wait until they file their taxes the following year to get assistance. As a result, a system that allows for the delivery of financial help in ‘advance’ of tax filing is critical.”

The proposal, still under development, was provided to GOP lawmakers to help them answer questions about Republican plans to replace and repeal the ACA at town hall meetings and other events – some of which have been the targets of protesters who support the ACA.

It contained talking points for GOP lawmakers to use, including that health insurance premiums on state exchanges have risen an average of 25 percent in this enrollment year, and 31 percent of U.S. counties have only one insurer to choose in their state exchanges.

House Minority Leader Nancy Pelosi has told Democratic House members to counter the GOP plan to garner support for a “repeal and replacement” of the ACA by holding events during the President’s Day break in support of the health care law.

Rep. John Larson, D-1st District, plans to hold a forum in Berlin on Saturday.

“As we stand poised to defend the Affordable Care Act from rollbacks and cuts by the Republican Congress, it is important to hear from my constituents,” Larson said. “House Democrats are hosting healthcare related events across the country this weekend in order to make sure all voices are brought to the table during this significant moment in our country.”

CT would lose Medicaid funds

Meanwhile, the GOP plan would allow states that choose to do so to continue receiving additional Medicaid funding to expand the pool of low-income residents covered under the program. But the federal-state cost share of the Medicaid expansion would change.

Now 95 percent of the price tag for Connecticut’s expansion is picked up by the federal government. The federal share is scheduled to decline slightly each year until it reaches 90 percent in 2020 and beyond.

Under the GOP plan, the expanded Medicaid money eventually would be subject to the same split as the state’s other Medicaid funding. For Connecticut, that’s 50-50.

“After a date certain, if states choose to keep their Medicaid programs open to new enrollees in the expansion population, states would be reimbursed at their traditional match rates for these beneficiaries,” the policy paper says. “This ensures continuity of care and coverage for low-income adults, but does not reward States that expanded Medicaid under Obamacare and allows individuals to cycle off the program into other coverage sources naturally.”

Insurers back changes

Under the plan, insurers would be able to go back to offering a wide range of policies with no federal requirements for minimum coverage.

The plan would allow people to tie heath savings accounts to “catastrophic” plans that cover major accidents or illnesses but not routine or preventive care.

Most of the proposals are backed by insurers

“Health savings accounts give consumers more options and control over their health care – and that will help bring down costs,” said Marilyn Tavenner, president and CEO of America’s Health Insurance Plans.

People with pre-existing conditions would be steered to state-run high-risk pools, subsidized by federal State Innovation Grants. High-risk pools tend to offer plans with high premiums.

The plan also calls for repealing a number of taxes used to fund the ACA, including a tax on health insurance premiums and on medical devices.

Ryan said Thursday Republicans will introduce a bill to repeal and replace the ACA when lawmakers return from next week’s recess.

“It has become increasingly clear that this law is collapsing,” Ryan said, citing Tuesday’s announcement by Humana that it would pull out of state health exchanges as another sign that the current system is failing.

“It will keep getting worse unless we act,” Ryan said.

Price’s HHS took steps this week to try to stabilize the insurance market and shaky exchanges. They included tightening the enrollment period and cutting the ACA’s open enrollment period in half.

Backed by insurers, the move was aimed at attracting a healthier, smaller pool of customers that would attract more insurance companies in states with limited choices.

Rep. Rosa DeLauro, D-3rd District, called the new rules a Trump administration plan to “sabotage” the ACA.

“For months, the Trump Administration has been waging a war on Affordable Care Act enrollment, and this new rule is just the latest attempt to sabotage the program,” she said. “If this rule is finalized, the Trump Administration will cut the enrollment period by more than half, give insurance corporations the option to kick doctors and other providers out of plans, and limit the number of providers consumers can visit …These attacks on Americans’ health insurance must end.”

Correction: An earlier version of this story incorrectly stated the federal and state shares of costs for the Medicaid expansion under the Affordable Care Act. 

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ABOUT THE AUTHOR

Ana Radelat Ana has written about politics and policy in Washington, D.C.. for Gannett, Thompson Reuters and UPI. She was a special correspondent for the Miami Herald, and a regular contributor to The New York TImes, Advertising Age and several other publications. She has also worked in broadcast journalism, for CNN and several local NPR stations. She is a graduate of the University of Maryland School of Journalism.

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