House Republicans released a healthcare plan Wednesday that would repeal the Affordable Care Act and implement traditionally conservative ideas such as tax credits for those without employer-sponsored insurance, high risk pools and changing Medicaid into state block grants.
Specific possible outcomes of the 37-page plan (PDF) are difficult to determine, because it contains few details or specific numbers. It does not indicate how much it would cost or how many people it would cover.
It is part of A Better Way, which is a slate of Republican policy ideas spearheaded by House Speaker Paul Ryan. In an event at the American Enterprise Institute Wednesday afternoon, Ryan said the ACA is fundamentally flawed and "treats patients like auto parts in an assembly line."
"Obamacare focused on quantity because it put bureaucracy first," he said. "Our plan focuses on quality because we put the patients first."
Republicans presented the plan as flexible, cost-conscious and consumer-oriented, but critics said it would increase individual healthcare costs, lower the rate of insured people and disproportionately disadvantage vulnerable groups.
A Republican outline for replacing the ACA has been long awaited. Ryan has repeatedly said a plan was forthcoming as he and the rest of the party held vote after vote attempting to repeal the legislation.
The health plan presumptive Republican presidential nominee Donald Trump released earlier this year contains many of the same ideas but goes into much less detail. Presumptive Democratic nominee Hillary Clinton has proposed expanding on the successes of the ACA while achieving universal coverage. She has also suggested letting Americans in their 50s buy into Medicare.
The GOP plan begins by repealing the ACA and its individual mandate. People who do not have insurance through their employer would receive age-adjusted tax credits to buy plans on the individual market. The proposal also expands the use of health savings accounts, allows plans to be sold across state lines and encourages small businesses and individuals to pool together and negotiate with insurance companies.
The plan calls for changing Medicaid by allowing states to choose between either a per-capital allotment or a block grant. It also lets Medicare beneficiaries buy a private plan on a Medicare exchange with a premium support payment starting in 2024.
The plan does retain some popular provisions from the ACA, including a ban on discrimination against those with pre-existing conditions and allowing children to stay or their parents' insurance until age 26.
In an editorial published Wednesday in USA Today, Rep. Kevin Brady (R-Texas) said the Republican plan should be thought of as a healthcare “backpack.”
“One filled with the tools you need to control your health care in the 21st century,” he wrote. “One that goes with you from job to job, state to state, home to raise a family or start a businesses, and into your retirement years if you like it.”
Opponents of the plan say using tax credits wouldn't help many uninsured obtain coverage because they are in a low tax bracket and wouldn't get enough money to pay premiums. They say the changes to Medicaid would also reduce coverage because states would get far less federal funding than they do now.
“The end result would almost certainly be the loss of health coverage and less access to needed healthcare for tens of millions of low-income Americans who rely on Medicaid,” said Edwin Park, vice president for health policy at the Center for Budget Policy and Priorities.
Economists have criticized high-risk pools as expensive and unsustainable. Even proponents of the idea have said far more than the report's suggested $25 million in the next 10 years would be needed to subsidize them.
Business groups largely praised the plan, but said they are concerned about the tax exclusion cap on employer-sponsored health coverage.
Democratic Reps. Frank Pallone of New Jersey and Gene Green of Texas released a statement criticizing the plan's lack of specifics.
“It's disappointing to see Republicans continue to devote so much time and energy to producing half-baked policy ideas rather than devoting their attention to improve Americans' access to healthcare,” they said. “There's no doubt their clear intention is the same as it has been for years, to put insurance companies back in charge and take healthcare away from millions of Americans.”
HHS Secretary Sylvia Mathews Burwell said the GOP ideas were “stale” and “would take our country backwards—back to coverage denials, back to co-pays for preventive care, back to annual coverage caps, back to risk of poverty for our seniors due to high health costs.”
A recent Modern Healthcare survey of health executives found that the vast majority support keeping the ACA and its push toward value-based payments.