GOP Leaders Unveil Proposed ACA Repeal, Replacement Plans

February 20, 2017 - GOP leaders have unveiled their latest proposal to repeal and replace the Affordable Care Act with new health insurance regulations. The outline includes cutting federal Medicaid expansion, moving more Medicaid control to the states, and restructuring how Americans pay for their health insurance.  

“Republicans want to put states in charge of their Medicaid programs and give them the tools, resources, and exibility to address their unique needs,” the GOP leaders said. “Under our proposal, Obamacare’s Medicaid expansion for able-bodied adult enrollees would be repealed in its current form. There would be a period of stability to ensure we are not pulling the rug out from underneath states or patients.”

The GOP is deeply concerned about Medicaid spending rates, and plans to provide states with fixed Medicaid allotments in the form of block grants.  

“Block grant funding would be determined using a base year and would assume that states transition individuals currently enrolled in the Medicaid expansion out of the expansion population into other coverage,” the plan says. “States would have exibility in how Medicaid funds are spent, but would be required to provide required services to the most vulnerable elderly and disabled individuals who are mandatory populations under current law.”

Consumer-facing changes in the GOP plan included increasing the amount of money that can be held in a tax-advantaged Health Savings Account (HSA). Under the ACA, an individual can contribute $6,550 to themselves and $13,100 for their family. The proposed increases are designed to promote consumer flexibility, Republican officials asserted.

The redesign would also promote a universal tax health care credit that isn’t based on income. The universal tax credit is a major piece of the GOP’s overarching healthcare goals of removing “one size fits all” subsidies.

This proposed tax credit would allow consumers to purchase health care across state lines and is age-rated so older consumers will get a higher credit than younger consumers. Consumers would be able to claim credits for dependents up to the age of 26.  

The GOP also aims to eliminate several current ACA consumer taxes such as health insurance premiums, the medicine cabinet tax, and taxes on medical devices. Tax credits would not be available if consumers had other payment options from an employer or government program.

The proposal wants to change high-risk pools for patients with complex care conditions under the ACA with “State Innovation Grants.” The GOP leaders say this allows states freedom to address high risk patient care on a state's’ own terms. Republicans believe these grants will foster a healthcare culture that effectively provides quality care to the highest risk patients without significant limitations.

Healthcare leaders have previously weighed the consequences of total ACA repeal. C-Level healthcare executives would like some ACA provisions kept such as increased insurance coverage and transitions into value-based reimbursement. The AHA believes that proper repeal legislation is crucial in order to keep providing adequate health coverage to those 20 million on ACA insurance.

The GOP’s proposal is the most recent in a long line of comparative bills and request presented to lawmakers.

Earlier this February, other lawmakers came forward with the Patient Freedom Act that also heavily promoted state-level healthcare control. And last June, Republicans revealed a plan to replace the ACA called A Better Way, which exhibited many of the same features as the new proposal.