Last night, House Republicans released a first draft (in formal legislative text) of their plan to repeal and replace Obamacare, officially titled, “The American Health Care Act.” Both highly controversial and political, the bill would repeal or make fundamental changes to key elements of Obamacare but also leave certain other elements intact. Considering this potential impact and the many front-page REAL news headlines we’ve seen analyzing the bill today, here are my top 5 initial takeaways from the House GOP’s new plan to repeal and replace Obamacare:
- The bill eliminates most of Obamacare’s taxes, mandates, and penalties. Gone would be the individual and employer mandate penalties (retroactive to the 2016 tax year) and the taxes on prescription drugs, over-the-counter medications, health-insurance premiums, and medical devices. And while not fully repealed, the bill would also delay the implementation of Obamacare’s controversial “Cadillac tax” on high-cost employer sponsored plans from 2020 until 2025.
- The bill includes fundamental reforms for Medicaid and the individual markets. Starting in 2020, the bill would repeal Obamacare’s individual insurance market premium tax credits and Medicaid expansion for new enrollees. In place of those provisions, the bill would create a refundable tax credit for individuals not eligible for employer or government sponsored insurance to purchase a plan in the individual market; expand the amount individuals can contribute to Health Savings Accounts (HSA); provide $100 billion for states to help ensure coverage for high-risk individuals; and transition Medicaid to a “per capita allotment” model where the federal government would provide states a defined financial contribution and more flexibility to administer Medicaid benefits.
- The bill includes very limited changes for Medicare and employer sponsored coverage. Unlike Medicaid and the individual insurance markets, this bill has very few reforms that touch on Medicare or employer sponsored insurance coverage. A controversial proposal to limit the tax exclusion of high cost insurance premiums for employees was scrapped at the last minute and the bill does not include any provisions that would roll back implementation of MACRA’s quality payment program or related value-based payment and delivery system reform efforts that were included in Obamacare.
- Remember “The Art of the Deal” and keep in mind this is just the opening offer. It is important to remember that this is only a first draft, not the final legislative text. For any normal bill, at this point in the legislative process we would now expect to see amendments, changes, political posturing, and deal making before a final bill could be passed into law. But with this bill, taking into account the broader political dynamics, the highly political nature of Obamacare, and the fact that this will be the first “negotiation” between President Trump and Congress, it’s impossible to predict where the process will go from here.
- This 123-page bill is neither a full “repeal and replace” of the nearly 2,700-page Obamacare, nor will it be the only “repeal and replace” of Obamacare. President Trump and Republican leaders in both houses of Congress have pledged to move this bill via the fast-track budget reconciliation process through Congress and to the President’s desk by the end of April. However, regardless of what final form this bill takes and fate it realizes, it is important to remember that this is not a complete “repeal and replace” of every provision in Obamacare, nor will it be the last attempt by President Trump and congressional Republicans to repeal, replace, repair, amend, edit, or change other parts of Obamacare. As noted by HHS Secretary Tom Price who this afternoon offered his support for this bill while stating it was still “a work in progress”, additional legislation and regulatory changes will also be critical elements of President Trump’s healthcare reform agenda.