- On Monday, the House Ways and Means Committee and the House Energy and Commerce Committee proposed two bills that together will effectively repeal and replace the Affordable Care Act. Combined the bills comprise the American Health Care Act.
Chairman Kevin Brady (R-TX) of the Ways and Means Committee released a bill that aims to dismantle ACA individual mandates and taxes, expand Health Savings Accounts (HSAs), and provide healthcare tax credits to families who don’t receive coverage through an employer.
In conjunction with Brady’s legislation, Energy and Commerce Committee Chairman Greg Walden (R-OR) proposed legislation that creates state-based funding for preventive services, grandfathers current ACA enrollees for proper transition from the ACA, and uses a per-capita formula to allot Medicaid funding.
“It provides Obamacare enrollees with access to the existing financial support for their plans through the end of 2019,” the lawmakers wrote in Wall Street Journal op-ed. “People will also be able to use their Obamacare subsidy to purchase expanded insurance options — including catastrophic coverage — without being tied to the failing exchanges.”
The two bills are an effort to address ACA enrollees and pick up on action items in a GOP plan that circulated last month. These action items include moving Medicaid funding and management to the state level, using tax credits and HSAs to move away from mandates. The plan also keeps highly-favored provisions of the ACA, such as the ability to stay on parental coverage until age 26 and non-discrimination coverage for pre-existing conditions.
“The legislation works to ensure a stable transition away from Obamacare. It preserves and protects insurance for the more than 150 million Americans who receive employer-sponsored health coverage,” the two chairmen said.
“Our plan preserves vital patient protections. Young Americans can continue coverage on their parents’ plans until age 26. People with pre-existing conditions cannot be denied policies. Nobody can be charged more for getting sick — period.”
The tax repeals from the House of Ways and Means focus on individual taxes for consumer services and Medicaid contributions.
Under the bill, individuals would receive retroactive relief for mandate penalties in 2016, with the earliest relief beginning for penalties after Dec. 31, 2015. A Medicare tax of 0.9 percent of individual income is another repeal under the bill beginning in 2018.
This section of the bill also creates a refundable, advanceable tax credit for individuals without employer insurance to access state-approved medical health insurance and unsubsidized COBRA insurance.
Based on their age, recipients are allowed set limits on credit amounts. Those under the age of 30 can receive $2,000, individuals between 30 and 39 will receive $2,500, people between 40 and 49 can receive $3,000. Anyone over the age of 60 are eligible to receive the maximum of $4,000. These credits stack for families and cap out at $14,000.
Individuals also would be able to increase their contributions to HSAs with a maximum of $13,100 for each family.
The repeals from the Ways and Means Committee also eliminate taxes on certain payers and brand pharmaceuticals starting on December 31, 2017.
Other repeals include the 3.8-percent net investment tax for the ACA based on income and assets, income threshold, the medical device tax, and taxes on HSAs.
The second half of the bill from the House Energy and Commerce Committee contains sections that address public health access, Medicaid reform, the elimination of Medicaid expansion, and initiatives the lawmakers believe will encourage the purchase of continual health coverage.
The Prevention and Public Health Fund (PPHF) under this bill would be continued in perpetuity under the authority of the Department of Health & Human Services and able to spend these dollars without congressional oversight. Funding would increase for the Community Health Center Program which provides financial support for Federally Qualified Health Centers.
Federal payments and funding for Medicaid, the Children’s Health Insurance Program, Maternal and Child Health Services Block Grants, and Social Services Block Grants would be frozen for a year.
Under a “Medicaid Enhancement Program,” repeals would be enacted towards expanded state authority for determining presumptive eligibility for Medicaid patients.
There are exceptions within the bill for determining eligibility that include children, pregnant women, and patients with either breast or cervical cancer. This would also revert the mandatory income eligibility requirements for poverty-related children that are 100 percent below the poverty line.
The elimination of the Medicaid expansion proposed by the House Commerce and Energy Committee repeals the state option to extend coverage to adults above 133 percent of federal poverty line by December 31st, 2019.
The repeals of Medicaid expansion also remove the requirement that state medicaid plans must provide the same essential health benefits that are required by plans on the ACA exchanges, again by December 31, 2019.
Other sections of the bill include the per capita allotment of Medicare to states. Certain payments would be exempt from the allotment including individuals covered under a Children’s Health Insurance Program (CHIP), people who receive assistance through an Indian Health Service facility, and individuals who are entitled to assisted coverage under the Breast and Cervical Cancer Early Detection Program.
The bill also includes a section entitled “The Continuous Health Insurance Coverage Incentive” that eliminates the individual mandate but provides a late surcharge for individuals who do not find continuing health insurance within a 63-day period.
“Beginning in open enrollment for benefit year 2019, there will be a 12-month lookback period to determine if the applicant went longer than 63 days without continuous health insurance coverage,” the bill states.
“If the applicant had a lapse in coverage for greater than 63 days, issuers will assess a flat 30 percent late-enrollment surcharge on top of their base premium based on their decision to forgo coverage. This late-enrollment surcharge would be the same for all market entrants, regardless of health status, and discontinued after 12 months, incentivizing enrollees to remain covered. This process would be for special enrollment period applicants in benefit year 2018.”