Congressional Republicans have been struggling for months to resolve one of the most vexing problems in their tortuous effort to replace the Affordable Care Act: What to do about the generous federal funding for states that broadened their Medicaid programs under the law, while not shortchanging the 19 states that balked at expansion?
Now, as the House begins to hone details of its legislative proposal, a possible compromise has emerged. It would temporarily keep federal dollars flowing to cover almost the entire cost of the roughly 11 million Americans who have gained Medicaid coverage but would block that enhanced funding for any new participants.
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On Friday, Politico released a leaked version of draft budget reconciliation legislation circulating among House staff—a version of House Republicans’ Obamacare “repeal-and-replace” bill. The discussion draft is time-stamped on the afternoon of Friday February 10—and according to my sources has been changed in the two weeks since then—but represents a glimpse into where House leadership was headed going into the President’s Day recess.
A detailed summary of the bill is below, along with possible conservative concerns where applicable. Where provisions in the discussion draft were also included in the reconciliation bill passed by Congress early in 2016 (H.R. 3762, text available here), differences between the two versions, if any, are noted. In general, however, whereas the prior reconciliation bill sunset Obamacare’s entitlements after a two-year transition period, the discussion draft would sunset them at the end of calendar year 2019—nearly three years from now.
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Anthem Inc. and other U.S. health insurers complained to the White House for more than a year that they were losing money on people who waited to sign up for Obamacare coverage until they were sick.
They pleaded with the Obama administration to stem their losses by tightening up on the enrollment rules. When their pleas went unmet, UnitedHealth Group Inc, Humana Inc, and Aetna Inc pulled out of most of the government subsidized health insurance market.
But now that the new Trump administration and Republican lawmakers control the future of healthcare, the industry is getting a new hearing.
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The House could use regular order, not reconciliation, to pass a bill that not only fully repeals ObamaCare—returning control of the private market to the states—but simultaneously puts into effect at least the core components of reform while including grandfathering and other provisions to smooth the transition to lower-priced options on the free market.
Such a bill could easily pass the House, putting pressure on the Senate. Would Minority Leader Chuck Schumer allow proper consideration of much-needed health-care reform? And with all the evidence that ObamaCare has been a disaster and—untouched by Republicans—is quickly unraveling, would Democrats, 25 of whom are up for re-election next year, vote to defend the status quo?
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America spends too much on Medicaid relative to other programs and services that might have a bigger impact on measured health outcomes for the poor. Giving states more flexibility in reaching these broad population health goals and better tools for measuring their progress would help states and the federal government scale up what works, while phasing out what doesn’t. Seema Verma, Trump’s pick to lead the Centers for Medicare & Medicaid Services, called for CMS “as the nation’s largest purchaser of health care…[to] do more, achieve more than the mere distribution of insurance cards,” saying it should use its programs to “truly make a difference in people’s lives to prevent and cure disease, manage chronic illnesses, and promote healthy lifestyles and independence from government assistance.”
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Current federal tax policy treats workers and their families who do not or cannot get health insurance through employment-based coverage unfairly and contributes to disruption in coverage when employees change jobs. Obamacare imposes a hefty excise tax on expensive employer coverage, a punitive measure that adds to the complexity of the current health care system.
Congress should repeal Obamacare’s Cadillac tax and set a simple cap on the employer exclusion. In addition, Congress should create a new type of individual tax relief that would be available to everyone, regardless of where they purchase coverage. Together, these policies would help to ensure that the federal government is not favoring one type of coverage or consumer over another and would go a long way toward restoring a functioning market in health care that is responsive to consumers.
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A leaked “discussion draft” of House Republicans’ Obamacare repeal-and-replace bill surfaced on Friday. The draft reveals important details about the plan being designed by House GOP leadership. The 106-page discussion draft, dated February 10, was obtained by Politico. It corresponds reasonably closely to the 19-page outline that House GOP leadership leaked on February 16.
The centerpiece of the plan is its attempt to replace Obamacare’s health insurance exchanges with a new program that would provide subsidies for Americans to buy any health insurance plan that is legally available in their state. It would enact two key regulatory reforms of the individual market for health insurance: it would revert back to states the ability to define the “essential health benefits” that insurers must cover, and it would allow insurers to charge their policyholders a much wider range of prices based on age. The plan would also significantly expand the ability of Americans to save money, tax-free, in health savings accounts, and it would make two major changes to the Medicaid program:
- It phases down Obamacare’s Medicaid expansion. States would retain the option to maintain a larger Medicaid program, but the federal government would only fund around 60% of the cost, compared to 90% under the ACA. That’s a fair way of balancing the interests of states that expanded Medicaid, and want to maintain that expansion, and states that did not, and don’t want to be punished for their fiscal restraint.
- It overhauls the pre-Obamacare Medicaid program, by converting it into a system of per-capita subsidies, in which states would receive a fixed dollar amount for each Medicaid enrollee resident within their borders, which they could then use to fund a safety-net health insurance program that they would design and administer.
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The U.S. House of Representatives is considering a bill that would repeal and replace the Affordable Care Act (ACA) as early as March of 2017, preceding by more than a year one of the deadlines President Donald Trump has stated for repealing and replacing Obamacare.
House Speaker Paul Ryan (R-WI) has said the House should pass legislation repealing Obamacare before April, and the House Energy and Commerce Committee is one of several aiming to mark up the legislation by March 1, The Hill reported on February 8.
The Trump administration may not be willing to repeal, replace, or repair ACA until the summer of 2018, Trump told Fox News host Bill O’Reilly on The O’Reilly Factor on February 5.
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Republicans are getting battered at town halls on ObamaCare, with constituents—or least protestors—yelling about the benefits they’ll lose if the entitlement is repealed. But maybe the better measure of public sentiment is the choices that the people who are subject to ObamaCare have made in practice. Consider the remarkable persistence of health insurance plans that aren’t in compliance with the ACA’s rules and mandates. These “grandfathered” and “grandmothered” plans aren’t obligated to meet ObamaCare’s very high “essential benefits” floor, nor are they required to obey price controls that limit how much premiums can differ based on pre-existing medical conditions. These regulatory differences have thus set up an instructive market test about the need for ObamaCare’s mandates. 8.1 million people chose to remain in their existing plans instead of purchase ACA coverage.
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Vice President Pence forcefully defended on Thursday night the Trump administration’s plans to repeal and replace the Affordable Care Act, saying the law known as Obamacare is a “nightmare” and that the administration is committed to “an orderly transition” to a new health care system. Pence said he and President Trump are committed to giving every American “access to quality, affordable health insurance. . . . We’ll have an orderly transition to a better health-care system that finally puts the American people first,” Pence said.
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