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Following the Trail of the Affordable Care Act Debate: Part 5 | Kidney News
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Following the Trail of the Affordable Care Act Debate: Part 5
This week House leadership publicly released the details of the American Health Care Act (AHCA), the foundation of the GOP's efforts to repeal and replace the Affordable Care Act (ACA).
The AHCA was initially released to three committees—Ways and Means, Energy and Commerce, and Education and the Workforce (review only). Ways and Means passed the legislation early on March 9 after a contentious 18-hour debate. That afternoon, the Energy and Commerce Committee voted passed the bill, after 27 hours of continuous debate. Democrats were especially concerned that the bill had not yet been given a “price tag” by the Congressional Budget Office.
What's In, What's Out, What's New?
While significant changes to the ACA are included in this bill, it does not represent a complete repeal of the ACA. Some of the popular provisions of the ACA are preserved by this legislation. Requirements to cover preexisting conditions, guarantee availability and renewability of coverage, cover children up to 26 and cap out-of-pocket expenditures are not repealed in the current version. Essential health benefits, except for Medicaid plans, are also preserved. Previous leaked drafts had included elimination of essential health benefit requirements (these requirements were a primary complaint of conservative critics of the ACA for years).
However, this bill represents a major revision and repeal of large provisions of current law:
1. The Republican vision for Medicaid under H.R. 1275 is to rebuild the funding schematic for the program around per capita caps. What does that mean? Rather than the federal government guaranteeing one dollar of funding for every one dollar a state spends on its Medicaid population, the AHCA guarantees a set amount of funding per person in the Medicaid population. The amount of funding is based on the number of enrollees and average Medicaid spending. This amount grows by the medical portion of the Consumer Price Index, a measure of inflation.
We have discussed previously the risk to state Medicaid expansion if the ACA is fully repealed. The AHCA allows states to use expansion funding until 2020. After that point, states may no longer offer enrollment into Medicaid programs for the expansion population; only people with incomes at or less than 138% of the federal poverty level would be eligible to enroll in Medicaid after that year. Typically, enrollment numbers drop if people are no longer prompted to reenroll, so the Medicaid population is predicted to decrease after 2020.
However, eight of the 32 states (including DC) that expanded Medicaid under the ACA included language in their laws that said they would only continue with the program as long as the federal government paid for most of it. In these “trigger states” (Arizona, Arkansas, Illinois, Indiana, Michigan, New Hampshire, New Mexico, and Washington) Medicaid enrollees would be in jeopardy if the AHCA passes.
According to analysts at Georgetown University, if the AHCA were to pass, the trigger states could drop 3.3 million people from Medicaid in 2020 or revoke some of their benefits, depending on the language in the state’s legislation.
2. Current law includes an individual mandate requiring every American to have health insurance. In contrast, the AHCA includes a Continuous Coverage Requirement that would penalize individuals who have a gap in coverage, applying a 30% premium surcharge on a new plan when they re-enroll. The penalty is the same regardless of age, income, or how long the individual has been without coverage. There is significant debate regarding whether this penalty will incentivize people to stay covered or not.
3. Tax credits play a prominent part in this bill. As we have reviewed previously, AHCA tax credits would be based on age and family size rather than income. They would not be adjusted by geographic differences in healthcare costs. The credits start at $2,000 for people under 30 and work their way to $4,000 for those 60 and over. Unlike previous versions of the GOP replacement plan that had no ceiling on the income a person could make to qualify for a tax credit, the AHCA phases out tax credits at $75,000 for individuals and $150,000 for joint filers.
For the first official repeal bill presented by the majority party in Washington, and one vocally supported by the President Trump, the AHCA has received an unusually negative reception.
After the March 9 committee approvals, the bill goes to the House floor for an up or down vote. If the AHCA makes it through the House, it will be considered in the Senate under reconciliation rules, meaning only measures directly impacting federal spending, revenue, or the debt limit will be considered. The limits of the reconciliation process present their own obstacles and may derail the bill if it makes it that far.
In the Senate, AHCA faces challenges from both sides of the ideological spectrum among Senate Republicans. Senate conservatives such as Senators Rand Paul (R-KY), Mike Lee (R-UT) and Ted Cruz (R-TX) all panned the bill describing it as “Obamacare Lite” or “not the Obamacare repeal bill we have been waiting for.” Perhaps a larger faction in the Senate are Republican moderates concerned about their constituents losing coverage under changes to Medicaid. Republicans in the Senate hold only a two-vote majority.
The American Medical Association, the American Health Association, the American Nurses Association and the AARP, among others, have voiced opposition. Conservative lobbying groups are spending to pressure Republicans into passing a full repeal.
Despite these objections, House Speaker Paul Ryan (R-WS) has consistently argued that Republicans ran on repeal and replace for years, and they owe it to their constituents to follow through. The AHCA, he says, is the only way to accomplish that goal.
In the Senate it will be considered under reconciliation rules, meaning only measures directly impacting federal spending, revenue, or the debt limit will be considered. The limits of the reconciliation process present their own obstacles and may derail the bill if it makes it that far.
All sides are putting money, influence, and power into action to pass or stall the bill. The mixed reception in Washington extends the present uncertainty about the future of healthcare in America. We will continue to cover events in Washington and keep you informed.
Following the Trail of the Affordable Care Act Debate: Part 1, Part 2, Part 3, Part 4