Capitol Correspondence - 02.17.17

House GOP Leaders Unveil ACA Repeal Plan

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This week, House Republicans met to discuss a repeal and replacement plan for the Affordable Care Act (ACA). The meetings featured a 19-page document titled, “Obamacare Repeal and Replace: Policy Brief and Resources“. The plan is largely based on Speaker of the House Paul Ryan’s (R-WI) “A Better Way” plan that was released last summer. The plan seeks dramatic federal cost savings through restructuring Medicaid from an open-ended entitlement to a block grant or per capita caps system, and repeal of the Medicaid expansion. Under the plan, states could choose between block grants and per capita caps. Block grant funding would be determined using a “base year” and “would assume that states transition individuals currently enrolled in the Medicaid expansion out of the expansion population into other coverage.” Per capita caps, meanwhile, would be allotted for beneficiary groups based on “each state’s average Medicaid spending in a base year, grown by an inflationary index.” The brief does not indicate which index would be used. 
The proposal would also immediately zero out the penalty taxes imposed for non-compliance with the individual and employer mandates. As part of the tax reform, the plan would create a new, advanceable, refundable tax credit to permit individuals to purchase private insurance. Subsidies would be based on age, not income, growing as an individual ages. 
The plan relies heavily on the use of Health Savings Accounts (HSAs), which allow people to put aside money on a tax-preferred basis to pay for health-related expenses. It would expand the amount of money allowed to be placed in HSAs, as well as offer flexibility for when money must be spent. 
The plan does not address some of the protections that have proved popular with the public that are in the ACA, including essential health benefits (EHBs), non-discrimination based on pre-existing conditions, and permitting children to remain on parents’ plans until age 26. The plan states that persons with pre-existing conditions and children up to age 26 will be protected, but does not indicate specifically what those protections will look like.