MH: The Battle Begins as House Republicans Release ACA Repeal Bill

NYAPRS Note: Following is a few bullets and several articles detailing the contents and impact of the GOP’s American Health Care Act replacement for the Affordable Care Act (Obamacare).

  • Tax Credits - Republicans would replace Obamacare subsidies with age-based tax credits ranging from $2,000 to $4,000 to help individuals pay for coverage. The credits would begin phasing out for people who make more than $75,000 for individuals and $150,000 for households. They would disappear completely for individuals who earn more than $215,000, with a cap of $290,000 for joint filers.
  • Medicaid - The plan unveiled Monday would freeze Medicaid's expansion in 2020 and phase it out over time. The bill would also shift Medicaid from an open-ended federal matching payment to a per-capita lump sum payment. About 70 million Americans are currently covered through Medicaid, with more than 11 million gaining coverage after the ACA took effect.
  • Hospitals - While the bill would reinstate the disproportionate share payments that were eliminated when the ACA took effect, the planned cuts to Medicaid would likely lower hospitals' revenues and force them to ramp up their charity care spending. Hospital profit margins are currently at their highest level since before the 2008-2009 recession.
  • Planned Parenthood - The program would be defunded for one year under the bill, a provision that conservatives want but which risks losing the support of some moderate Republicans. The White House had reportedly offered to allow Planned Parenthood to preserve its funding if it stopped providing abortions, a deal that Planned Parenthood rejected.
  • High-net worth individuals - The bill repeals a slew of ACA-related taxes, like a 3.8 percent investment tax on the well-to-do and a 0.9 percent surcharge on wages above $250,000. The move would save the top 0.1 percent of earners about $195,000 annually, according to the Tax Policy Center.
  • Mandates - The individual and employer mandate remain but the penalties for violating them are repealed.
  • Cost-sharing - Cost sharing subsidies, which help people pay for copays and deductibles, are repealed in 2020.
  • Coverage for children - The bill allows parents to keep their children on their insurance until they are 26.
  • Coverage for abortion - No one can use tax credits to purchase a plan that offers abortion coverage.

NYS impact: The Republican plan provides more help for the middle class to purchase health insurance. This is particularly important in the New York City metro area where salaries tend to be higher because the Affordable Care Act's subsidies are based on income without accounting for living expenses. The Republican plan is worse for people earning less than $30,000, or the working poor, for essentially the same reason. Obamacare subsidies increase as people earn less. Republican subsidies do not. (see Kaiser Family Foundation chart comparing tax credits in the Republican plan versus those offered under Obamacare at here).

The potential consequences on New York’s healthcare system will be a major focus on NYAPRS’ Annual Executive Seminar, “All Hands on Deck: Ensuring a Recovery Focus in a Changing Healthcare Environment,” to be held April 27-8 at the Albany Hilton. National and state experts who’ll be on hand include Ron Pollack, Founding Executive Director, Families USA; Chuck Ingoglia, Senior Vice President, Public Policy and Practice Improvement, National Council for Behavioral Health; James Lytle, Partner, Manatt, Phelps and Phillips, LLC; Bruce Feig, Senior Consultant, Sachs Policy Group; Jorge R. Petit, MD, Regional Senior VP of the New York Region, Beacon Health Options and Kate Breslin, President & CEO, Schuyler Center for Analysis and Advocacy, with comment by NYS Deputy Secretary for Health Paul Francis.

Register today at https://rms.nyaprs.org/event/?page=CiviCRM&q=civicrm/event/info&reset=1&id=23.

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The Battle Begins as House Republicans Release ACA Repeal Bill

By Harris Meyer Modern Healthcare March 6, 2017

Under pressure from conservatives and the business community, House Republicans have released a bill to repeal and replace the Affordable Care Act that ditches their previous proposal to tax high-value employer health plans.

The 123-page bill, dubbed the American Health Care Act, was released Monday night. It would replace the ACA's income-based premium tax credits with fixed, age-based tax credits that generally would be smaller. It would end enhanced federal funding for states to expand Medicaid to low-income adults. And it would convert Medicaid from an open-ended entitlement to a program of capped, per-capita payments to the states.

But the bill would continue funding for the Medicaid expansion until 2020, and also keep the law's premium subsidies through the insurance exchanges until 2020. That could set up a political battle over keeping or ending Obamacare coverage expansions just as the next presidential election campaign heats up.

GOP leaders said they would begin marking up the bill Wednesday in two committees, even though no one other than House Republicans had a chance to see it before its release. The Congressional Budget Office has not yet issued its assessment of the bill's cost and impact on coverage levels.

House Speaker Paul Ryan has said he wants Congress to pass the complicated repeal-and-replace bill by early April through an expedited budget reconciliation process on a party-line vote. But hard-right House and Senate Republicans oppose the bill's refundable tax credits to help people afford insurance.

And at least four Senate Republicans from Medicaid expansion states oppose its repeal of the expansion and its overall cuts in Medicaid funding. GOP leaders can't afford to lose any votes.

“House Republicans are moving forward with fiscally responsible legislation to deliver relief from Obamacare's taxes and mandates and lay the groundwork for a 21st century health care system,” House Republicans wrote in their bill summary.

To pass the bill through the reconciliation process and avoid a Senate Democratic filibuster, Republicans will have to convince the Senate parliamentarian that all the provisions of the bill are germane to the budget. And the bill can't be deemed to increase the federal deficit 10 years or more from now. Some of the bill's insurance market changes may have a tough time surviving those procedural tests.

The bill would:

  • retroactively repeal the ACA's requirement for most Americans to buy health insurance, as of the end of 2015. That may leave insurers wary about offering plans for 2018.
  • end enhanced federal funding at the end of 2019 for states to expand Medicaid to low-income adults.
  • convert Medicaid to a program of capped per-capita federal grants to the states, starting in 2019. Hospital leaders are very nervous about how this would affect uncompensated care and payment levels.
  • establish age-based, refundable premium tax credits to help people buy insurance, with the credits phasing down starting at income levels of $75,000 for individuals and $150,000 for families. These credits would be adjusted annually by the consumer inflation rate plus 1%.
  • starting in 2018, repeal most of the ACA taxes that finance the law's premium subsidies, Medicaid expansion, and Medicare benefit enhancements.
  • retain the ACA's so-called Cadillac tax on high-value plans but delay it until 2025.
  • eliminate the ACA's minimum essential benefits at the end of 2019.
  • offer states $100 billion over nine years to establish high-risk pools or other mechanisms for stabilizing the individual insurance market.
  • let insurers charge individuals who buy insurance after letting their coverage lapse a 30% premium penalty for one year, to encourage people to maintain continuous coverage.
  • allow insurers to charge older customers five times higher premiums than they charge younger people, up from the ACA's permitted 3 to 1 age differential.
  • repeal the ACA's cut in funding for Medicaid disproportionate share payments, which has not yet taken effect.
  • repeal the ACA's subsidy to reduce low-income enrollees' cost-sharing in private health plans, effective at the end of 2019.
  • prohibit federal Medicaid funding for Planned Parenthood or any organization that performs abortions, and bar use of tax credits for purchase of any health plan that covers abortions.

Business groups had warned that taxing employer health benefits would cause employers to terminate coverage and/or prompt employees to drop out of those plans. “It would pretty quickly expose people to income and payroll taxes, and the number of people purchasing coverage would decline,” said Kristof Stremikis, associate policy director at the Pacific Business Group on Health.

The release of the bill reportedly was delayed by objections from both conservative and moderate Republicans, as well as by a non-public analysis from the Congressional Budget Office showing that it would significant increase uninsured rates. According to one report, the CBO indicated to GOP staffers that an earlier version of the House bill could cause 10 million to 20 million people to lose their employer-sponsored insurance.

Douglas Elmendorf, dean of the Harvard Kennedy School and former CBO director, said under the Republican bill, the number of people covered by employer-sponsored plans could decline. That's because some employers would stop offering coverage and let workers use the new tax credits, which would be available to a broader income group than the ACA's credits.

In addition, younger and healthier employees may decide they could get a better deal using the new credits to buy coverage in the individual market. Employers fear that could drive up costs in their company-sponsored plans by leaving them with an older and sicker pool of enrollees.

“The employer market does pretty well in hedging against risk selection,” said Kristof Stremikis, associate policy director at the Pacific Business Group on Health. “If you provide incentives to leave that market, you could certainly do damage.”

At the same time, the House GOP's age-based tax credits generally would be smaller than the ACA's, which are based on income. That could discourage lower- and middle-income people from using the credits to buy insurance, boosting uninsured rates. “These are people with very little to no discretionary income,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation. “With smaller tax credits, they'd be unlikely to consider health insurance affordable.”

The bill would erase most of the ACA's taxes that financed the law's premium subsidies, Medicaid expansion, and Medicare benefit enhancements. But it postpones the repeal of most of those taxes until 2018, a year later than previously proposed. The CBO has projected that repealing the ACA's Medicare payroll tax on high-income individuals, along with its surtax on net investment income, would provide $346 billion in tax relief to higher-income people over the next decade.

The only new financing mechanism House Republicans previously had proposed was the tax on high-value employer health plans, and now that's gone. They have not explained how they would finance their new tax credits.

It's widely anticipated that to pay for the new system, Republicans will rely heavily on savings from constraining growth in federal Medicaid spending through their proposed per capita payment system. It was not clear at deadline for this article how the annual growth rate in these payments would be set.

In a FAQ accompanying release of the bill, House GOP leaders posed the question, “How are you paying for this plan? How much is it going to cost taxpayers?” The answer: “We are still discussing details, but we are committed to repealing Obamacare and replacing it with fiscally responsible policies that restore the free market and protect taxpayers.”

The bill would begin phasing out the premium tax credits in 10% increments starting at an income level of $75,000 for individuals and $150,000 for families. This was a concession to the most conservative Republicans, who objected to providing government subsidies to wealthier people.

But many Republicans remain worried about whether the nonpartisan CBO will score the House bill as costing a lot of money while increasing the number of uninsured Americans. Some congressional Republicans immediately denounced the cost of the new tax credits, while others insisted on waiting until the CBO scores the bill before voting on it.

“Republicans are stuck because there's no way to maintain the current level of coverage without subsidies that are similar in magnitude to the ACA's, and without rules for insurance markets that are similar to the ACA's,” Elmendorf said.

http://www.modernhealthcare.com/article/20170306/NEWS/170309925?utm_source=modernhealthcare&utm_campaign=mh-alert&utm_medium=email&utm_content=20170306-NEWS-170309925

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GOP Unveils Obamacare Replacement Amid Sharp Party Divide

House Republicans released a long-awaited plan, but key Senate Republicans are already balking.
By Rachael Bade, Paul Demko and Jennifer Haberkorn POLITICO | March 7, 2017

With the blessing of the Trump White House, House Republicans on Monday finally released a plan to repeal and replace Obamacare, a long-anticipated moment in the GOP’s years long campaign to upend the Democratic health care law.

But there were warning signs even hours before GOP leaders unveiled the proposal. Four key Senate Republicans in a Monday letter balked at the House plan to repeal the Medicaid expansion after 2020, underscoring how sharply divided the party still remains over how to transform the health care system and accomplish a core campaign promise.

House conservatives, meanwhile, had yet to commit to backing the proposal. GOP leadership, in an olive branch to the far-right, curbed eligibility of the health care tax credits in the final draft, a central component of the plan.

House GOP leaders have also yet to release the official budget score that details the cost of the plan and how many people could lose insurance, a huge issue for moderates who fear blowback in their swing districts.

“We are concerned that any poorly implemented or poorly timed change in the current funding structure in Medicaid could result in a reduction in access to life-saving health care services,” wrote the four Republican senators to Majority Leader Mitch McConnell (R-Ky.). Signatories included Sens. Rob Portman of Ohio, Shelley Moore Capito of West Virginia, Cory Gardner of Colorado and Lisa Murkowski of Alaska—Republicans from states that expanded Medicaid under Obamacare.

Speaker Paul Ryan in a statement Monday night vowed the bill would “drive down costs, encourage competition and give every American access to quality, affordable health insurance.” The statement, notably, did not promise to insure as many Americans as Obamacare — a sore point for some moderate Republicans. GOP leaders, rather, have vowed to ensure access to coverage while emphasizing Obamacare’s “failures.”

The bill, dubbed the “American Health Care Act,” released Monday would repeal some of the biggest piece of Obamacare that have led to more than 20 million people getting insurance coverage since enactment in 2010.

The Republican bill gets rid of individual mandate – the least popular part of ACA but a linchpin of the coverage expansion. It preserves Obamacare’s requirement that insurers accept everyone regardless of pre-existing conditions but allows insurance companies to charge a 30 percent surcharge if consumers don’t keep “continuous” insurance coverage.

Republicans would replace Obamacare subsidies with new age-based tax credits ranging from $2,000 to $4,000 to help individuals pay for coverage. The credits would begin phasing out for people who make more than $75,000 for individuals and $150,000 for households. They would disappear completely for individuals who earn more than $215,000, with a cap of $290,000 for joint filers.

The plan unveiled Monday would freeze Medicaid’s expansion in 2020 and phase it out over time. Nationwide, more than 11 million people got Medicaid through the expansion under Obamacare.

Planned Parenthood also would be defunded for one year under the bill — a provision conservatives want but which risks losing the support of moderate Republicans like Murkowski and Sens. Susan Collins of Maine.

Senate Republicans can absorb no more than two defections if they hope to pass the measure under powerful budget procedures that allow for a simple majority vote.

It also includes $100 billion in state grants over a decade. Those funds are designed to help states take care of particularly sick, expensive customers and help stabilize the individual insurance market.

House Republican leadership removed a controversial cap on the tax exemption for employer-sponsored health insurance that was used to pay-for an earlier version of the bill. Many Republicans had balked at the proposal and called it a tax hike on health care. That provision almost certainly would have sparked opposition from business groups, and Democrats had already pilloried it as an unseemly tax on health benefits.

House GOP leadership also made a number of concessions to conservatives in the final bill, hoping to garner support from the far-right — lawmakers who have blasted the plan as “Obamacare lite.”

Freedom Caucus Chairman Mark Meadows (R-N.C.) and RSC Chairman Mark Walker (R-N.C.) in recent weeks came out against the GOP plan to replace Obamacare tax subsides with advanceable refundable health care tax credits. They preferred a tax deduction that would not allow those who don’t pay taxes to receive a check in the mail, calling such “advanceable” credits a “new entitlement.” At the crux of their concern about the draft was the price tag, which they worried would increase the deficit.

House GOP leadership is hoping the income cap on the credits will assuage their concern. The change to the tax credits does not necessarily ensure conservative opposition to the House plan will evaporate.

There was no deal struck between Hill or White House leaders and concerned conservatives in the House Freedom Caucus or the Republican Study Committee. But two conservative sources told POLITICO the right is pleased with the latest changes.

Still, just minutes after Republicans released the plan, libertarian-leaning Rep. Justin Amash panned it on Twitter as “Obamacare 2.0."

At “first glance, we have concerns,” said Jon Meadows, spokesman for conservative group Freedom Works, which came out against an earlier draft of the House plan.

The current plan also delays repealing many of Obamacare’s taxes until 2018, a year later than previously proposed. That will make up for at least some of the revenue lost by getting rid of the cap on the exclusion for employer-sponsored plans.

Conservatives are likely to loathe the proposed delay in the repeal of many of Obamacare’s tax increases. Among the taxes that will remain on the books for another year are those on prescription and over-the-counter drugs, health savings accounts and tanning services.

Club for Growth president David MacIntosh blasted the plan for keeping the Obamacare taxes for a year longer than before. He argued “getting rid of the exclusion cap, while delaying Obamacare tax repeals is the kind of gimmickry that Democrats used when they were trying to pass it in the first place."

"There should be no delay in repealing Obamacare taxes,” he said in a statement to POLITICO. "They should be repealed immediately.”

Democrats blasted the GOP bill, saying it would cut Americans off from coverage and would do more to prevent lottery winners from getting Medicaid than enact meaningful health reforms.

Republicans are facing a time crunch to provide insurers with some assurance about what the Obamacare marketplaces are going to look like next year. Health plans are already well into the process of making decisions about prices and products for 2018. If there’s a mass exodus of insurers, the marketplaces could completely collapse, leaving millions of Americans with no access to coverage.

That’s a big reason why Republicans are pushing to get the bills through both chambers before they leave town on April 7 for the Easter recess.

“The more we prescribe from here the harder it is to have good policy by Easter,” said Sen. Bill Cassidy (R-La.), who told reporters he learned more about the bill from media reports than from his colleagues in the House.

House Republican sources and a senior administration official said the White House would be putting out a statement in support of the bill. But the administration source added that the statement would intentionally leave some "wiggle room" for negotiations.

"We know this will take some time and we want to give some people room and time to come around to it," this source said.

"Today marks an important step toward restoring healthcare choices and affordability back to the American people," White House spokesman Sean Spicer said in a statement later on Monday.

"President Trump looks forward to working with both Chambers of Congress to repeal and replace Obamacare."

Josh Dawsey and Adam Cancryn contributed to this report.

http://www.politico.com/story/2017/03/obamacare-repeal-concession-gop-leadership-235723