House Republicans unveil Obamacare replacement bill
House Republicans released draft legislation Monday to replace former president Barack Obama’s signature health care law, proposing to phase out the Affordable Care Act’s Medicaid expansion and change the law’s subsidies for private insurance.
“It is Obamacare gone,” House Ways and Means Chairman Kevin Brady, R-Texas, told Fox News. “There’s nothing left there.”
The bill’s details released Monday do not say how many people would have coverage compared with Obamacare. But federal support would be reduced to allow Republicans to repeal the law’s tax increases on the wealthy, insurance companies, drugmakers and others.
The bill would also repeal the requirements that most people buy insurance and larger employers provide it.
It would still allow adult children to stay on their parents’ plans until age 26. And the bill would not repeal the popular provision barring insurance companies from denying coverage to people with pre-existing health problems. Instead, to keep people from buying coverage only when they need it, insurers could raise premiums 30% for those jumping back into the market.
The legislation is already under attack not only from Democrats but from some Republicans who have raised concerns about eliminating coverage for millions of people who got coverage under the bill’s expanded Medicaid eligibility. In addition, some of the most conservative Republicans have warned that the replacement tax credits the bill provided to help people buy insurance would be just another entitlement program.
House committees are expected to take up the legislation later this week.
“We deliver on President Trump’s promise to repeal and to begin replacing,” Brady said.
States that expanded Medicaid under the Affordable Care Act to people earning up to 138% of poverty could still get federal funding for those enrolled before January 2020. But if those beneficiaries left the program, the federal funding would disappear.
States would also no longer receive an open-ended federal match on the amount they spend on all Medicaid beneficiaries. Instead, they would be given a set amount based on the number of enrollees in different coverage categories, such as the disabled, aged and children.
“What we want to do is restore power to the states put Medicaid on a budget,” Oregon Republican Rep. Greg Walden, chairman of the House Energy and Commerce Committee, told Fox News.
Four Republican senators — Rob Portman of Ohio, Shelley Moore Capito of West Virginia, Cory Gardner of Colorado and Lisa Murkowski of Alaska — said Monday they were concerned that an early draft of the bill had not provided enough “stability and certainty” for families covered by the Medicaid expansion. They said any replacement plan offer a “stable transition period and the opportunity to gradually phase-in their populations to any new Medicaid financing structure.”
It was not immediately clear whether the bill unveiled Monday night would put those concerns to rest.
Some conservative Republicans have complained about the subsidies that would replace the tax credits the ACA provides to help people earning up to 400% of poverty buy private insurance if they’re not offered plans through a job.
The GOP alternative offers refundable credits that become more generous with age. Unlike an earlier draft, the credits phase out at higher income levels. But at lower income levels, recipients can still receive a larger credit than the amount of taxes they owe, which has raised concerns among some Republicans.
The tax credits would range from $2,000 to $14,000 a year.
Those receiving tax credits can use them to purchase any insurance plans, not just those sold on the exchanges created by the Affordable Care Act. That would include purchasing “catastrophic” plans that offer limited coverage. They could not use the credits for plans that cover abortion services.
Democrats across the board have promised to fight any changes to the law that would scale back health care coverage.
Oregon Sen. Ron Wyden, the top Democrat on the Senate Finance Committee, said Americans would pay more and get less coverage under the GOP bill.
“This bill sends a loud and clear message: tax cuts for special interests and the wealthy matter more than your health care,” he said in a statement. “Congressional Republicans are leading a desperate forced march to pass a dangerous bill written in secret which few members of Congress have seen, let alone read.”
The new version of the bill no longer includes a provision included in the draft to limit the existing tax exemption on employer-provided plans. As before the ACA passed, neither employers nor their workers are taxed on the value of health care coverage provided through a job. An earlier version of the bill would have imposed a tax on more generous plans. That was opposed by business groups and labor unions.
The ACA imposed a tax on high-cost plans, which has been delayed until 2020. The GOP bill would repeal that tax, but it would come back in 10 years in order to keep the bill within cost limits.
The bill increases the tax benefits for health savings accounts, raising the limits on how much people can put aside for health expenses.
Ron Pollack, executive director of the advocacy group Families USA, said the bill doesn’t deliver on Trump’s promise to offer “insurance for everybody” that is “much less expensive and much better.”
“This bill would strip coverage from millions of people and drive up consumer costs,” he said.
Contributing: Eliza Collins
Panel: Repeal of ObamaCare taxes would cost more than $500B
The Joint Committee on Taxation on Tuesday released estimates showing that the repeal and delay of many of ObamaCare’s taxes in the House Republicans’ legislation would result in more than $500 billion in lost federal revenue.
The GOP legislation would repeal most of ObamaCare’s taxes, with the notable exception of the “Cadillac tax” on high-cost health plans.
Under current law, the Cadillac tax is set to take effect in 2020, and the bill would delay the Cadillac tax until 2025. The committee, which provides official revenue estimates of tax legislation, estimated that delaying the tax would cost $48.7 billion over 10 years.
Several excise taxes on parts of the healthcare industry would also be repealed.
The committee estimated that over a 10-year period, repealing the 2.3 percent medical-device tax would reduce revenue by $19.6 billion over 10 years, repealing the tax on brand pharmaceutical companies would cost $24.8 billion and repealing the health-insurance tax would cost $144.7 billion. Repealing the 10-percent sales tax on indoor tanning services would cost $600 million.
Two of the ObamaCare taxes that would be repealed are targeted at people with high incomes. The committee estimated that repealing ObamaCare’s net investment tax on the wealthy would reduce revenue by $157.6 billion over 10 years, and repealing the Medicare surtax on high earners would reduce revenue by $117.3 billion.A provision to repeal the $500,000 cap on the deduction health insurance companies can take for an employee’s compensation would lower revenue by $400 million, the panel said.
The committee released revenue estimates of some parts of the GOP legislation, but a full “score” of the legislation remains unavailable.
The independent Congressional Budget Office (CBO) is preparing a thorough accounting of the bill’s projected impact.
Some revenue-related parts of the bill, such as repealing the individual and employer mandates and creating new refundable tax credits, will be included in the CBO’s estimates. The CBO score is also expected to include estimates about the number of people who would lose healthcare coverage under the bill.
Many Democratic lawmakers have blasted Republicans for scheduling committee markups of the legislation before the full CBO score is released.
“We don’t even know how large of a negative impact this bill would have yet because Republicans are irresponsibly rushing forward before this bill even receives a score from CBO,” Senate Minority Leader Charles Schumer (D-N.Y.) said Tuesday.
The estimates from the committee focus on the provisions that the House Ways and Means Committee will consider Wednesday. The House Energy and Commerce Committee is also slated to mark up their portion of the legislation that day.
Democrats and liberal groups have blasted the House GOP legislation as a tax cut for the wealthy.
“The bill is a winning lottery ticket for wealthy Americans,” Schumer said.
But Ways and Means Committee Chairman Kevin Brady (R-Texas) on Tuesday defended repealing the ObamaCare taxes.
“I look at the 20,000 jobs that have left America because of the irresponsible, medical-device tax, I look at the health insurance taxes and others that drove up healthcare costs on Americans, especially those who could least afford it,” Brady said.
“You run down tax increase after tax increase after tax increase, they hurt the economy, they hurt healthcare, they achieve nothing,” he said. “I don’t want Americans to continue to struggle under the ObamaCare taxes.”
In order for the GOP healthcare plan to pass the Senate with a simple majority, it can’t increase the deficit after 10 years. Brady said lawmakers would make sure the measure follows that rule.
The GOP is completely botching the rollout of its health care plan
What if there’s no affordable insurance to buy?
Leslie Kurtz needed three plates, eight screws and a big assist from her insurer after breaking every bone in her ankle while white water rafting.
Coverage she purchased through a public insurance exchange established by the federal health care law paid $65,000 toward surgery and the care she needed after the 2015 accident. But that protection may not exist next year because insurers have abandoned the Knoxville, Tennessee resident’s exchange. As of now, Kurtz has no future coverage options, and she is worried.
“I can’t afford to have everything I’ve worked for taken away because I fell down the steps,” Kurtz said.
Her county is one of 16 in Tennessee that lack even a single insurance company committed to offering coverage for 2018 on the exchange, after Humana announced last month plans to exit.
Exchanges set up by the Affordable Care Act were designed to give customers a chance to shop for coverage and then buy a plan, most with help from tax credits. The idea was that such a marketplace would push insurers to offer affordable plans to compete for customers.
But insurers in many markets have been pulling back from the exchanges after losing money. According to an analysis by the Associated Press and the health care firm Avalere Health, more than 1,000 counties, where about 2.8 million people are insured through the exchanges, are down to their last insurance carrier, according to the most recent data.
With less competition, that could mean sharply higher rates. And with more insurers still considering leaving other markets, customers around the country could be stuck like Kurtz with no affordable coverage options in 2018.
Insurers still have a few more weeks to decide to stay in their exchanges, and other insurers may jump into new markets, though that can be expensive and risky for them. The government recently announced several short-term fixes for the exchanges, and insurers have welcomed the moves. But they want to see the final version of the improvements before deciding on 2018.
“No insurer wants the negative public backlash from dropping insurance for lots of people, but the companies need to feel like the market is stable and that there’s a chance of making money,” said Larry Levitt, a health insurance expert with the nonprofit Kaiser Family Foundation.
Chief among undecided companies is the Blue Cross-Blue Shield carrier Anthem Inc. It is the lone insurer on exchanges in 300 counties in seven states, according to data compiled by the AP and Avalere.
Anthem CEO Joseph Swedish would not commit to participating on exchanges next year and said in a statement last month that the market is sliding toward “significant deterioration and requires changes to ensure future stability and affordability.”
Anthem and the many other companies that sell coverage under the Blue Cross-Blue Shield brand will be crucial to the fate of the exchanges because they often specialize in insurance for individuals, and many have a long-standing presence in their markets. They also are the only remaining option on exchanges in nearly a third of the nation’s 3,100 counties.
For instance, Blue Cross and Blue Shield of North Carolina is the lone exchange option in 95 counties, covering more than 500,000 people, according to the analysis by AP and Avalere. The North Carolina insurer, which is not owned by Anthem, declined to comment on its 2018 plans.
Insurers typically are still sorting out coverage plans at this time of year, so it’s not unusual for them to be undecided about 2018. But never before have insurers bluntly stated that they can’t commit until they see what the government does to improve the exchanges.
The Kaiser Family Foundation’s Levitt says insurers are worried about losses, but they also may be using the leverage their indecision gives them.
“Insurers kind of want the threat that they may pull out to be taken seriously now, so that they get some of the changes they are looking for,” he said.
Customers can buy coverage outside the exchanges, if insurers are selling individual plans in their market. But then they won’t be able to use tax credits to help pay the bills, which may be particularly painful since many markets have seen prices soar.
Customers won’t know for certain who is selling on their exchanges until next fall. While insurers have to apply to sell coverage on their exchanges generally by late spring or early summer, they can drop out later if claims turn out worse than expected, noted Dave Dillon, a fellow of the Society of Actuaries.
Last fall, Blue Cross and Blue Shield Nebraska announced a little more than a month before open enrollment started that it was shuttering its exchange business due to a loss of $140 million.
Insurance experts have said bigger metropolitan areas usually have more choice on their exchanges. But smaller cities or rural areas could be hurt most if more insurers pull back.
Customers who already lost exchange options for 2018 are concerned. Knoxville resident Melissa Nance bought her Humana plan on the exchange without a subsidy, but she’s worried that she won’t find an affordable replacement after that insurer leaves.
The 45-year-old is fighting an aggressive form of leukemia. She needs insurance to cover blood tests and CT scans to detect whether the cancer has returned.
“I’m a sick person now,” she said. “I am constantly having to go to the doctor.”
Fellow Knoxville resident Leslie Kurtz is thinking about moving. The self-employed television producer needs subsidies to afford coverage for her family of four.
Kurtz says she would have gone bankrupt if she had no insurance when she broke her ankle.
“I don’t have $65,000, I would have had to sell the house,” she said. “We need access to health care because (stuff) happens.”