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January 23, 2017 12:00 AM

Amid healthcare industry jitters, GOP senators offer state-based ACA replacement plan

Shannon Muchmore
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    Two Republican senators unveiled an Affordable Care Act replacement bill that gives states freedom to design their own health insurance systems and lets them keep the ACA system if they want.

    The plan announced Monday, called the Patient Freedom Act of 2017, gives more authority on healthcare regulations to states and retains the ACA's provisions guaranteeing insurance access for people with pre-existing medical conditions and allowing children to stay on their parents' insurance until age 26.

    The full text of the bill announced by Sens. Bill Cassidy (R-La.) and Susan Collins (R-Maine) was not yet released as of Monday afternoon. But the senators said states would have the option of keeping the ACA's coverage framework or choosing an alternative model that offers refundable tax credits, based on age, that can be used for health savings accounts. They also said states would receive the same amount of federal funding they currently receive under the ACA.

    But Democrats and health policy experts say the sponsors' promises will be hard to keep.

    Republicans moved immediately at the start of the new session of Congress to begin repealing the ACA through the budget reconciliation process that requires only a simple majority of votes in the Senate. But others have pushed for slowing down the repeal process until Republicans agree on a replacement plan.

    Hours after his inauguration, President Donald Trump signed a broad but vague executive order telling executive agencies to “minimize unwarranted economic and regulatory burdens” of the ACA and to “create a more free and open healthcare market.”

    It's unclear what the impact of the order will be. But it has left many healthcare industry leaders feeling uneasy.

    The relatively moderate bill announced by Cassidy and Collins may entice some Democrats, because it would let states that support the ACA, such as California and New York, keep that framework. But Senate Democratic leader Chuck Schumer of New York was quick to attack it.

    “Ultimately, this proposal is an empty façade that would create chaos—not care—for millions of Americans,” he said in a written statement. “Republicans should drop their disruptive repeal plans and work with Democrats to improve, not gut, the Affordable Care Act and healthcare system for all Americans.”

    Topher Spiro, a health policy expert at the liberal Center for American Progress, said turning control over to states is not an acceptable replacement. “If you live in a state that is run by Republicans, they would be enabled to gut your coverage and increase your costs,” he said. “But even if you live in a blue state like California that wants to continue what it's doing, the bill would cut funding for subsidies.”

    Ron Pollack, executive director of Families USA, a pro-ACA group, said in a written statement that the bill “falls way short of providing the protections and coverage people have under the Affordable Care Act.” The plan would increase premiums, subsidies and out-of-pocket costs, he added.

    At a news briefing Monday, Sean Spicer, Trump's press secretary, did not give a direct answer to two questions about whether the Trump administration will enforce the ACA's tax penalty on people who do not buy health insurance. Insurance experts say not enforcing the law's mandate could lead to an unraveling of the individual insurance market in which about 20 million Americans buy coverage.

    Spicer would only say that Trump will work with Congress on crafting an ACA replacement plan.

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