House Republicans release latest ACA replacement plan

Repealing the Affordable Care Act (ACA), a cap on Medicaid funding, medical liability reform and loosening restrictions on insurers denying coverage based on pre-existing conditions are among the features of the new House Republican health care plan.

What’s notably missing from the 37-page white paper are cost estimates, as Republican aides said “it’s a framework” for more detailed legislation to be introduced next year, once a new president is in office.

The paper is divided based on five principles:

• Repeal the ACA: “This law cannot be fixed. Its knot of regulations, taxes and mandates cannot be untangled. We need a clean start in order to pursue the patient-centered reforms the American people deserve.”
• Provide more choices, lower costs, and greater flexibility: “The nation’s healthcare system is too bureaucratic and too expensive. It didn’t work before Obamacare, and it most certainly does not work now.”
• Protect the most vulnerable: “Obamacare’s solution was to force millions of people onto Medicaid, a broken insurance program that has historically failed lower-income families. We reject this approach.”
• Spur medical innovation: “Last year, the House passed the 21st Century Cures Act, which would pave the way for new ideas and support advancements in cures and treatments. Our plan builds on that legislation and promotes U.S. leadership in this area.”
• Protect and preserve Medicare: “The program is unsustainable and will fail current and future Americans without significant reforms. The problem is driven by demographics, cost growth and outdated payment systems that encourage overuse of health services.”

Based on those principles, the plan offers numerous changes from the ACA, while retaining certain aspects of the law. Young adults would still be covered by their parents’ plans until they turn 26, and insurers wouldn’t be allowed to drop policyholders if they get sick.

The protections for pre-existing conditions would be tweaked. Patients with a pre-existing condition would have to be covered continuously to be protected. Those without insurance would be protected under a one-time open enrollment period. Not signing up wouldn’t bring tax penalties, as it does under the ACA, but those with pre-existing conditions would likely pay much more for coverage later.

“If someone chooses not to enroll during this one-time open enrollment period, the individual can get coverage at another time,” the plan said. “However, making the decision to forego coverage during this one-time open enrollment period will result in the forfeiture of continuous coverage protections and lead to higher health insurance coverage costs for that individual for a period in the future.”

In place of those protections, the Republican plan would offer $25 billion in funding to high-risk pools, which would be administered by state insurance officials.

A main target of the ACA repeal attempt will be jettisoning the law’s numerous taxes and penalties. The mandate for companies with more than 50 employees to provide insurance for full-time workers, defined as anyone who works over 30 hours per week, would be scrapped, as would the law’s so-called “Cadillac tax” on high-cost plans.

The Republican tax plan does offer its own unspecified tax credits for people without Medicaid, Medicare or coverage through an employer, though not on the level of ACA subsidies. Rather than being based on income, the amount of the new subsidy would be based on age. It would be distributed monthly and could be used on a plan of the recipient’s choice. If there’s money left over after purchasing coverage, the remaining amount would be put into something like a health savings account.

“In contrast to the expensive debacle of HealthCare.gov, administration of the tax credits under our plan would be more flexible and available for shoppers through multiple portals, including private exchanges,” the plan said. “Robust verification methods would be put in place to protect taxpayer dollars and quickly resolve any inconsistences that occur.”

The tax credit would be paid for by capping the exclusion of employer-sponsored plan from being taxed—though the plan doesn’t detail exactly where that cap would be placed.

Pooling would be also be encouraged under the plan. Insurance plans would be allowed to be sold across state lines, with interstate compacts possible to allow individual market customers in different states to be pooled together. Small businesses would be allowed to pool their employees together in association health plans.

Beyond the insurance markets, the plan also proposes several major changes to Medicaid and Medicare.

It reintroduces the idea of turning Medicaid into a block grant program distributed to states to spend how they see fit, unless states opt for a per capita allotment. This proposal offers a more detailed timeline, with the per capita funding going into effect in 2019. No more states would be allowed to expand Medicaid as allowed under ACA, and federal payments for each Medicaid enrollee would be capped.

“The aim of this policy is to provide a predictable path for states, while transitioning many of the able-bodied adults from Medicaid into commercial coverage with the tax credit or employment-based coverage. This policy also rebalances federal spending to ensure able-bodied adults above poverty are not prioritized over the most vulnerable beneficiaries,” the plan said.

For Medicare, the plan calls for “reinvestments” in Medicare Advantage plans, shutting down the Center for Medicare and Medicaid Innovation (CMMI), and eliminating the ban on physician-owned hospitals.

There’s also the promise of liability reforms for medical professionals in the plan.

“We know that comprehensive medical liability reform that includes caps on non-economic damages will improve patients’ access to quality care while reducing the overall cost of health care in America. Our plan will include liability reform that includes caps on non-economic damage awards, ensuring plaintiffs can recover full economic damages and that patients will not have their damages taken away by excessive lawyer contingency fees,” the plan said.

Republicans also promised to work with states on physician-friendly statutes like proportional liability, independent pre-discovery medical review panels and “higher standards of evidence for medical professionals following clinical practice guidelines developed by national and state professional medical societies.”

The initial reaction to the proposals from Democrats has been negative, as was expected.

“What we expect from the latest Republican blueprint is more of the same—recycled proposals that would take health care away from millions of Americans without any real trace of an alternative,” Reps. Sander Levin, D-Mich., and Jim McDermott, D-Wash., said in a joint statement.

The plan notably includes provisions regarding abortion, which are sure to stir up partisan fights if they’re included in legislation. A section of the white paper is titled “Protecting Life and Conscience Rights,” calling for assurances that federal funding won’t go to health plans that cover abortion or to states who require plans to cover those services.