House Republicans Kick-off Phase One of GOP Efforts to Repeal and Replace Obamacare – What Does this Mean for You?

On March 7, 2017, House Republicans released the American Health Care Act (AHCA) – phase one of the GOP’s approach for repealing and replacing major portions of the Affordable Care Act (ACA). In releasing the AHCA, House Speaker Ryan discussed how healthcare reform would be achieved in three phases:

      • First, Congress would pass the currently proposed legislation through the special budget reconciliation process.
      • Second, Health and Human Services Secretary Tom Price would use his broad discretion to eliminate/revise current ACA regulations.
      • Third, there will be the introduction and passage of other bills that will need bigger backing and could include the ability to buy insurance across state lines.

Capitol HillUnder phase one, Republicans will use the budget reconciliation process to eliminate many of the major revenue/spending provisions of the ACA such as insurance affordability provisions, individual and employer mandates, taxes, and Medicaid reforms. In addition, the AHCA would repeal the ACA’s actuarial value requirements and replace the ACA’s three-to-one age ratio limit with a five-to-one ratio.

It is important to note that the AHCA does not repeal many of the major insurance reforms put in place by the ACA, such as Obamacare requirements that health plans:

      • Cover preexisting conditions
      • Guarantee availability and renewability of coverage
      • Cover adult children up to age 26
      • Cap out-of- pocket expenditures and the ACA’s prohibitions against health status underwriting; lifetime and annual limits; and discrimination on the basis of race, nationality, disability, age, or sex.

Finally, the ACA would not eliminate the essential health benefits provisions – except with respect to Medicaid plans.

While the AHCA would maintain the ACA prohibitions against health plans discriminating against individuals with pre-existing health conditions, the legislation would impose a 30 percent late-enrollment surcharge – in addition to the base premiums – for applicants who do not maintain continuous health coverage of more than 63 days over a 12-month period beginning in open enrollment for the 2019 benefit year.

In reviewing the legislation, it also appears that the AHCA does not address the ACA’s titles affecting Medicare, quality of care, program integrity, biosimilars, workforce reform and the Indian Health Service. However, the bill does propose significant changes in the Medicaid program – transitioning the program away from its current entitlement funding approach to a per-capita cap basis by 2020.

For example, the AHCA would roll back federal funding for the ACA’s expansion that allowed states to provide Medicaid coverage to all low-income individuals under 138 percent of the poverty level as opposed to just the specific categories of children, pregnant women, elderly and the disabled who were previously eligible. 31 states chose to expand their Medicaid programs and individuals who are covered under the expansion would continue to be funded by the federal government after 2020, but states would no longer be allowed to enroll anyone under those expanded criteria. Additionally, any enrollee who loses eligibility for the expansion program would not be able to re-enroll in the program again.

While the AHCA would eliminate the ACA Prevention Fund, the legislation would replace it with a Patient and State Stability Fund, which states could take advantage of from 2018 through 2026. States can use funds provided under this program for a number of purposes including:

      • Providing financial assistance to high-risk individuals
      • Providing incentive to “appropriate entities” to provide reinsurance to stabilize individual market insurance premiums
      • Reducing the cost of insurance for individuals with high rates of utilization of health services
      • Promoting participation and health insurance options in the individual and small group markets
      • Promoting preventive, dental, vision care, and mental health and substance use disorder services
      • Paying providers directly for the provision of such services
      • Providing assistance to individuals to reduce out-of-pocket costs

At the time of this report, House Republicans were hopeful that the AHCA would be approved by the House by mid-March. However, final approval of the bill in its current form is less than certain over on the Senate side.

Information provided by Christopher Gallagher – OAC Policy Consultant. 

References:

Health Affairs
Examining The House Republican ACA Repeal and Replace Legislation
by: Timothy Jost

For additional resources on the repeal and replacement of Obamacare, including information on how these legislative changes might affect individuals with obesity, please see below:

Health Insurance for Obesity After the ACA - Conscienhealth



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