AANEM News Express

AANEM News Express

Republicans Release ACA Replacement Plan

On March 6, 2017, the House Republican leadership released its Affordable Care Act (ACA) repeal and replacement bills, collectively titled the “American Health Care Act”. President Donald Trump backed the bill the following day, noting that it is open to negotiation.
The bill does not repeal the ACA; rather, it repeals specific portions. The legislation eliminates the individual mandate, instead creating a system of tax credits to encourage people to purchase insurance in the open market. It also contains dramatic changes to Medicaid funding, essentially doing away with the ACA’s expansion of Medicaid funding by 2020, replacing it with a per-capita cap and, thus, shifting much of the burden to the states.
The proposed legislation does leave in place several key pieces of the ACA, including:
  • Caps on out-of-pocket expenditures, as well as lifetime and annual limits;
  • Covering preexisting conditions;
  • Covering adult children up to age 26; and
  • Guaranteed availability and renewability of coverage.
The Health Affairs Blog provided the following summary of the legislation:
In summary, the legislation’s tax cuts will be very attractive to wealthy Americans and health insurers and providers, who would get a trillion dollars in tax breaks. It could cause consternation for Medicaid recipients and state Medicaid programs, which would see federal funding for Medicaid steadily diminish, potentially thinning out coverage. The legislation could be bad news for recipients of current tax credits who are older, sicker, and poorer, and who live in areas where care is expensive. They may be able to afford low actuarial value coverage with the tax credits the bills would provide them, but they are unlikely then to be able to afford the cost sharing that coverage will impose.
The committees will begin the markup process of the legislation on March 8. It is expected that few, if any, Democrats will support the bills and there is also serious dissension within the Republican Party so the bills are likely to face an uphill battle, particularly in the Senate where the Republicans hold 52 votes (assuming Vice President Pence casts a deciding vote) and cannot afford to lose more than two. The AANEM policy department will continue to monitor the progress of the legislation and provide updates as they become available.

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