Leaked House GOP draft offers first look at details of ACA repeal legislation

A leaked draft of the House Republican bill to repeal the Affordable Care Act would end Medicaid expansion by 2020, spend much more than expected on state high-risk pools, and create premium tax credits offering 60-year-olds just twice as much as 30-year-olds.

The bill also would repeal all of the ACA's taxes that finance the law's premium subsidies, Medicaid expansion and Medicare benefit enhancements. In their place, the bill would establish a new tax on employees for the value of generous employer health benefits. It would hit plans at and above the 90th percentile of current premiums. That idea is deeply unpopular with business groups and labor unions.

The “discussion draft,” dated Feb. 10 and obtained by Politico, is certain to draw criticism from both Republicans and Democrats. House Speaker Paul Ryan wants to present an ACA repeal bill as early as this week and pass it through the expedited budget reconciliation process on a straight party-line vote before the Easter recess in early April.

The draft likely is undergoing changes now.

That may be because insiders say the Congressional Budget Office has scored the bill as causing large increases in the nation's uninsured rate, which would rattle more moderate congressional Republicans who are nervous about causing millions of people to lose insurance coverage.

Under the House bill, refundable premium tax credits would be established in 2020 based on age, unlike the ACA's income-based credits. People under 30 would receive $2,000, while people over 60 would get $4,000. Both low-income and high-income people would get the same amount.

Insurers had pushed to increase the permitted age-based premium differential to 5-to-1, up from the 3-to-1 differential allowed by the ACA. Insurers say older people have medical costs that are at least five times as great as younger people.

“The credit in the House Republican bill would be plenty adequate at age 30 but pretty inadequate above age 60, particularly for people with lower incomes,” said John Holahan, a health services researcher at the Urban Institute. “I'm not sure why they picked those numbers.”

To address the issue of covering people with costly pre-existing medical conditions, the House bill would offer states $100 billion over nine years to set up high-risk pools and other mechanisms for insuring such folks.

That's much more than the $25 billion House GOP leaders proposed last year in their Better Way white paper. But it's still not enough to provide solid, affordable coverage to those with pre-existing conditions, given that previous estimates have pegged the annual cost of running adequate high-risk pools at $15 billion to $25 billion.