The battle begins as House Republicans release ACA repeal bill
Skip to main content
Sister Publication Links
  • Modern Healthcare Metrics
MDHC_Logotype_white
Subscribe
  • Subscribe
  • Register
  • Login
  • News
    • This Week's News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • People
    • Regional News
    • Digital Edition
    • MACPAC thinks HHS needs new measures for Medicaid payment errors
      CMS to repay hospitals for doctor's visits
      Community Health Systems' CFO to retire at end of year
      Chart reviews boost Medicare Advantage payments by $6.7 billion, OIG finds
    • HealthPartners sheds more than 400 jobs across three rounds of cuts
      Kaiser Permanente seeks to address trauma in 25,000 schools by 2023
      KPC Group misses key deadline on Verity hospitals purchase
      Not-for-profit hospitals stabilized by Medicare pay raise, DSH cut delays
    • Michigan Blues makes deals with seven health organizations aiming to bend cost curve
      ACA exchange enrollment lags as deadline nears
      Plan members unlikely to benefit from Supreme Court risk corridor battle
      Joan Budden
      Q&A: Priority Health CEO eager to share best practices with Total Health Care
    • CMS to repay hospitals for doctor's visits
      Capitol Building with pills
      Week Ahead: House to vote on drug bill; SCOTUS hears risk-corridor case
      MedPAC thinks hospice payments are too high
      MedPAC says ambulatory surgical centers don't need a pay raise
    • Analysts to CommonSpirit Health: Show us the savings
      Smallest hospitals saw biggest earnings gains last month
      Sutter Health postpones financial filing
      doctor helping patient stock image Sandoz
      Sponsored Content Provided By Sandoz
      As hospital executives look to reduce costs, biosimilars offer a compelling option
    • astronaut
      Astronauts developed bloodstream issues in space
      Sponsored Content Provided By ABM Healthcare
      Protecting and Maintaining Medical Devices
      human hand robotic hand stock image
      Sponsored Content Provided By Deloitte
      The Health System of the Future: How Digital Health Technology is Transforming Care
      EHR
      EHR vendors most in-use throughout Medicare incentive program
    • Hospitals need more than HCAHPS to measure patient experience, report says
      Promising greater safety, a tiny widget creates chaos for tube feeders
      IHI releases principles for improving patient safety measures
      MRIs of dense breasts find more cancer but also false alarms
    • Community Health Systems' CFO to retire at end of year
      Kaiser Permanente names Gregory Adams CEO
      Google Health hires AliveCor's chief medical officer
      Trinity Health appoints new COO: Ben Carter
    • Midwest
    • Northeast
    • South
    • West
  • Special Features
    • Best Practices
    • InDepth Special Reports
    • Innovations
    • Chest x-ray from a patient with a vaping-related lung injury
      Vaping-related cases lead to care guidelines from Intermountain
      Arkansas Children’s was a founding partner in Solutions for Patient Safety.
      Children's hospitals collaborate rather than compete on patient safety
      Peer recovery specialists at St. Barnabas Medical Center work with nurse Brenna Zarra.
      Peer recovery helping patients with addiction seek treatment
      UNC Health Care trains staff to treat dementia patients
    • Linda Kenney
      Patient advocate recalls two medical errors that nearly killed her
      Arkansas Children’s was a founding partner in Solutions for Patient Safety.
      Children's hospitals collaborate rather than compete on patient safety
      Kim Hollon
      Hospitals fall short of patient-safety goals 20 years after 'To Err is Human'
      Dr. Mark Chassin
      One-size-fits-all approach to patient safety improvement won’t get us to the ultimate goal—zero harm
    • Randy Oostra, CEO of ProMedica
      HCR ManorCare deal laid foundation for ProMedica’s growth
      Advanced ICU Care
      Telemedicine helps rural hospitals meet intensivist shortage
      Paging Dr. Robot: Artificial intelligence moves into care
      A child being screened for vision problems using a smartphone.
      App screens kids for eye problems before they can talk
  • Transformation
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • ProMedica doubles down on social needs data analysis
      Amazon taps first pharmacy for Alexa Rx management
      Trump administration unveils new price transparency rules
      A child being screened for vision problems using a smartphone.
      App screens kids for eye problems before they can talk
    • Health systems weigh return on investment as they ramp up tech
      VA dives into artificial intelligence R&D
      Home health to pare down therapy services, up telehealth offerings
      Amazon launches medical transcription service
    • Chest x-ray from a patient with a vaping-related lung injury
      Vaping-related cases lead to care guidelines from Intermountain
      Advanced ICU Care
      Telemedicine helps rural hospitals meet intensivist shortage
      Peer recovery specialists at St. Barnabas Medical Center work with nurse Brenna Zarra.
      Peer recovery helping patients with addiction seek treatment
      UNC Health Care trains staff to treat dementia patients
    • CMS to repay hospitals for doctor's visits
      Chart reviews boost Medicare Advantage payments by $6.7 billion, OIG finds
      Value-based pay still struggles to improve costs, quality
      Hospitals sue HHS over negotiated price disclosure rule
  • Data/Lists
    • Rankings/Lists
    • Data Points
    • Modern Healthcare Metrics
  • Op-Ed
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
    • Randy Oostra, CEO of ProMedica
      HCR ManorCare deal laid foundation for ProMedica’s growth
      Steve Strongwater
      How Atrius Health stayed independent by not shying away from risk
      Why moving the VA to a new EHR was a pivotal decision
      Why AdventHealth's rebrand was more than a name change
    • Terry Shaw
      A diverse and inclusive culture should empower others
      Paving the path to diversity and inclusion
      The next step in healthcare evolution
      Breaking Bias: A road map to boost women and minorities into healthcare leadership
    • Dr. Richard Snyder
      Outdated privacy laws hinder coordinated care, especially in the fight against addiction
      David Dill and Keith Myers
      Healthcare partnerships are a proven path to better care, healthier communities
      Health systems need to devote more resources to caring for the caregivers
      Chip Kahn and Alan Morgan
      Rural healthcare needs innovation, policy changes to survive
    • Letters: Let’s keep humanity in discussions about patient safety
      Hospital with money
      Letters: Let providers set their prices,
 and then publish them all
      Letters: Ambulatory surgery centers aren't getting a break on regulation
      Letters: Rising Medicaid spending isn't a windfall for providers
    • Sponsored Content Provided By Optum
      How blockchain could ease frustration with the payment process
      Sponsored Content Provided By Optum
      Three steps to better data-sharing for payer and provider CIOs
      Sponsored Content Provided By Optum
      Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
      Sponsored Content Provided By Optum
      Why CIOs went from back-office operators to mission-critical innovators
  • Awards
    • Nominate
    • Award Programs
    • Previous Award Programs
    • Other Award Programs
    • Nominations Open - Top 25 Minority Leaders
      Nominations Open - Health Care Hall of Fame
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Top 25 Minority Leaders
    • Top 25 Women Leaders
    • Excellence in Nursing Awards
    • Design Awards
    • Top 25 COOs in Healthcare
    • 100 Top Hospitals
    • ACHE Awards
  • Events
    • Conferences
    • Galas
    • Webinars
    • Leadership Symposium
    • Healthcare Transformation Summit
    • Critical Connections: Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Workplace of the Future Conference
    • Strategic Marketing Conference
    • Health Care Hall of Fame Gala
    • Top 25 Women Leaders Gala
    • Best Places to Work Awards Gala
    • Top 25 Minority Leaders Gala (2020)
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Government
March 06, 2017 12:00 AM

The battle begins as House Republicans release ACA repeal bill

Harris Meyer
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    (Story updated at March 7, 2017)

    Under pressure from conservatives and the business community, House Republicans have released a bill to repeal and replace the Affordable Care Act that ditches their previous proposal to tax high-value employer health plans.

    The 123-page bill, dubbed the American Health Care Act, was released Monday night. It would replace the ACA's income-based premium tax credits with fixed, age-based tax credits that generally would be smaller. It would end enhanced federal funding for states to expand Medicaid to low-income adults. And it would convert Medicaid from an open-ended entitlement to a program of capped, per-capita payments to the states.

    But the bill would continue funding for the Medicaid expansion until 2020 and also keep the law's premium subsidies through the insurance exchanges until 2020. That could set up a political battle over keeping or ending Obamacare coverage expansions just as the next presidential election campaign heats up.

    GOP leaders said they would begin marking up the bill Wednesday in two committees, even though no one other than House Republicans had a chance to see it before its release. The Congressional Budget Office has not yet issued its assessment of the bill's cost and impact on coverage levels.

    House Speaker Paul Ryan has said he wants Congress to pass the complicated repeal-and-replace bill by early April through an expedited budget reconciliation process on a party-line vote. But hard-right House and Senate Republicans oppose the bill's refundable tax credits to help people afford insurance. And at least four Senate Republicans from Medicaid expansion states oppose its repeal of the expansion and its overall cuts in Medicaid funding. GOP leaders can't afford to lose any votes.

    “House Republicans are moving forward with fiscally responsible legislation to deliver relief from Obamacare's taxes and mandates and lay the groundwork for a 21st century health care system,” House Republicans wrote in their bill summary.

    To pass the bill through the reconciliation process and avoid a Senate Democratic filibuster, Republicans will have to convince the Senate parliamentarian that all the provisions of the bill are germane to the budget. And the bill can't be deemed to increase the federal deficit 10 years or more from now. Some of the bill's insurance market changes may have a tough time surviving those procedural tests.

    The bill would:

    • Retroactively repeal the ACA's requirement for most Americans to buy health insurance, as of the end of 2015. That may leave insurers wary about offering plans for 2018.

    • End enhanced federal funding at the end of 2019 for states to expand Medicaid to low-income adults.

    • Convert Medicaid to a program of capped per-capita federal grants to the states, starting in 2019. Hospital leaders are very nervous about how this would affect uncompensated care and payment levels.

    • Establish age-based, refundable tax credits for premiums to help people buy insurance, with the credits phasing down starting at income levels of $75,000 for individuals and $150,000 for families. These credits would be adjusted annually by the consumer inflation rate plus 1%.

    • Starting in 2018, repeal most of the ACA taxes that finance the law's premium subsidies, Medicaid expansion and Medicare benefit enhancements.

    • Retain the ACA's so-called Cadillac tax on high-value plans but delay it until 2025.

    • Eliminate minimum essential benefits requirement in Medicaid expansion plans at the end of 2019.

    • Offer states $100 billion over nine years to establish high-risk pools or other mechanisms for stabilizing the individual insurance market.

    • Let insurers charge a 30% premium penalty for one year for individuals who have let their coverage lapse and want to buy insurance; the penalty is meant to encourage people to maintain continuous coverage.

    • Allow insurers to charge older customers five times higher premiums than they charge younger people, up from the ACA's permitted 3-to-1 age differential.

    • Repeal the ACA's cut in funding for Medicaid disproportionate-share payments, which has not yet taken effect.

    • Repeal the ACA's subsidy to reduce low-income enrollees' cost-sharing in private health plans, effective at the end of 2019.

    • Prohibit federal Medicaid funding for Planned Parenthood or any organization that performs abortions, and bar use of tax credits for purchase of any health plan that covers abortions.

    Business groups had warned that taxing employer health benefits would cause employers to terminate coverage and/or prompt employees to drop out of those plans. “It would pretty quickly expose people to income and payroll taxes, and the number of people purchasing coverage would decline,” said Kristof Stremikis, associate policy director at the Pacific Business Group on Health.

    The release of the bill reportedly was delayed by objections from both conservative and moderate Republicans, as well as by a nonpublic analysis from the Congressional Budget Office showing that it would significantly increase uninsured rates. According to one report, the CBO indicated to GOP staffers that an earlier version of the House bill could cause 10 million to 20 million people to lose their employer-sponsored insurance.

    Douglas Elmendorf, dean of the Harvard Kennedy School of Government and former CBO director, said under the Republican bill, the number of people covered by employer-sponsored plans could decline. That's because some employers would stop offering coverage and let workers use the new tax credits, which would be available to a broader income group than the ACA's credits.

    In addition, younger and healthier employees may decide they could get a better deal using the new credits to buy coverage in the individual market. Employers fear that could drive up costs in their company-sponsored plans by leaving them with an older and sicker pool of enrollees.

    “The employer market does pretty well in hedging against risk selection,” Stremikis said. “If you provide incentives to leave that market, you could certainly do damage.”

    At the same time, the House GOP's age-based tax credits generally would be smaller than the ACA's, which are based on income. That could discourage lower- and middle-income people from using the credits to buy insurance, boosting uninsured rates. “These are people with very little to no discretionary income,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation. “With smaller tax credits, they'd be unlikely to consider health insurance affordable.”

    The bill would erase most of the ACA's taxes that financed the law's premium subsidies, Medicaid expansion and Medicare benefit enhancements. But it postpones the repeal of most of those taxes until 2018, a year later than previously proposed. The CBO has projected that repealing the ACA's Medicare payroll tax on high-income individuals, along with its surtax on net investment income, would provide $346 billion in tax relief to higher-income people over the next decade.

    The only new financing mechanism that House Republicans previously had proposed was the tax on high-value employer health plans, and now that's gone. They have not explained how they would finance their new tax credits.

    It's widely anticipated that to pay for the new system, Republicans will rely heavily on savings from constraining growth in federal Medicaid spending through their proposed per capita payment system. It was not clear at deadline for this article how the annual growth rate in these payments would be set.

    In a FAQ accompanying release of the bill, House GOP leaders posed the question, “How are you paying for this plan? How much is it going to cost taxpayers?” The answer: “We are still discussing details, but we are committed to repealing Obamacare and replacing it with fiscally responsible policies that restore the free market and protect taxpayers.”

    The bill would begin phasing out the premium tax credits in 10% increments starting at an income level of $75,000 for individuals and $150,000 for families. This was a concession to the most conservative Republicans, who objected to providing government subsidies to wealthier people.

    But many Republicans remain worried about whether the nonpartisan CBO will score the House bill as costing a lot of money while increasing the number of uninsured Americans. Some congressional Republicans immediately denounced the cost of the new tax credits, while others insisted on waiting until the CBO scores the bill before voting on it.

    “Republicans are stuck because there's no way to maintain the current level of coverage without subsidies that are similar in magnitude to the ACA's, and without rules for insurance markets that are similar to the ACA's,” Elmendorf said.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Sponsored Content
    Get Free Newsletters

    Sign up for free enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today

    The weekly magazine, websites, research and databases provide a powerful and all-encompassing industry presence. We help you make informed business decisions and lead your organizations to success.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS
    • Instagram

    Stay Connected

    Join the conversation with Modern Healthcare through our social media pages

    MDHC_Logotype_white
    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    Modern Healthcare
    Copyright © 1996-2019. Crain Communications, Inc. All Rights Reserved.
    • News
      • This Week's News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition
    • Special Features
      • Best Practices
      • InDepth Special Reports
      • Innovations
    • Transformation
      • Patients
      • Operations
      • Care Delivery
      • Payment
    • Data/Lists
      • Rankings/Lists
      • Data Points
      • Modern Healthcare Metrics
    • Op-Ed
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Nominate
      • Award Programs
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Top 25 Minority Leaders
        • Top 25 Women Leaders
      • Previous Award Programs
        • Excellence in Nursing Awards
        • Design Awards
        • Top 25 COOs in Healthcare
      • Other Award Programs
        • 100 Top Hospitals
        • ACHE Awards
    • Events
      • Conferences
        • Leadership Symposium
        • Healthcare Transformation Summit
        • Critical Connections: Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
        • Workplace of the Future Conference
        • Strategic Marketing Conference
      • Galas
        • Health Care Hall of Fame Gala
        • Top 25 Women Leaders Gala
        • Best Places to Work Awards Gala
        • Top 25 Minority Leaders Gala (2020)
      • Webinars
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing