BREAKING: Republicans’ Plans to Repeal the ACA Appear to Not Touch Internal System Reform Provisions

Feb. 28, 2017
There is considerable confusion right now around congressional Republicans’ stated intentions to repeal and replace the ACA, while all known provisions of a draft bill focus solely on the Act’s health insurance provisions

Just hours prior to President Donald Trump’s first appearance before a joint session of the U.S. Congress, efforts on the part of Republicans in the U.S. Senate and the U.S. House of Representatives to repeal and replace the Affordable Care Act (ACA) appear to be in some state of disarray, according to media reports.

On Tuesday morning, The Hill published a story online under the headline, “GOP leader: Leaked ObamaCare replacement ‘no longer’ viable.” Scott Wong and Jessie Hellmann of The Hill reported that, “A day after House conservatives panned a leaked GOP draft ObamaCare replacement plan, a top Republican leader on Tuesday described the proposed legislation as ‘no longer even a viable draft that we’re working off of.’ Majority Whip Steve Scalise (R-La.), the No. 3 House Republican and chief vote-counter, told reporters he had just spoken to Republican Study Committee Chairman Mark Walker (R-N.C.), who issued a statement Monday saying he could not vote for the leaked draft or recommend his 170 members support it because of its use of refundable tax credits. Another influential conservative leader, Freedom Caucus Chairman Mark Meadows (R-N.C.), came out against the draft plan earlier in the day. ‘What [Walker] said was, of the draft he saw — which is no longer even a viable draft that we’re working off of — that he had issues with components of that draft,’ said Scalise, himself a former chairman of the Republican Study Committee (RSC).”

These developments come just four days after a draft bill for replacement of the ACA was leaked to the news media. Its authenticity has neither been formally confirmed, nor formally denied, by Republican leaders in the U.S. House of Representatives. On Feb. 27, Timothy Jost published a detailed analysis of the leaked bill draft, under the headline, “A Look At Republican Intentions? Diving Into The Leaked ACA Replacement Bill,” in the Health Affairs Blog. The actual leaked draft, which was published online by POLITICO, can be read here.

Republicans in both houses of Congress appear to be at loggerheads with each other over the extent to which any legislation introduced in Congress should go in eliminating large health insurance provisions in the ACA. The most politically conservative Republicans in the House in particular, including those in the very conservative Freedom Caucus, are demanding that any bill introduced in Congress enact sweeping changes to dismantle some of the core health insurance provisions of the ACA, while more moderate Republicans in both houses of Congress are arguing for more moderate legislation. As a result, the declarations on the part of both President Trump and Rep. Paul Ryan, the Speaker of the House (R.-Wis.) and Senate Majority Leader Mitch McConnell (R.-Ky.) that the ACA would very swiftly be repealed and replaced by the Republican Congress, with the support of a new Republican President, appear to be contradicted by the political infighting among Republicans in both houses.

Readers of Healthcare Informatics should know that the draft bill that had been leaked last weekend to POLITICO is focused solely on the health insurance provisions of the ACA. Indeed, there is no mention of anything that does not relate to the Act’s health insurance provisions. That would indicate that internal health system reform likely would not be touched at all, if this draft represented the entirety of whatever legislation ultimately was introduced into the House of Representatives (and eventually the Senate). That having been said, there is no guarantee whatsoever that the full scope of the legislation would not ultimately also include internal healthcare system reform elements, just as the ACA itself included such elements.

Meanwhile, Timothy Jost wrote in his analysis that “Much of the bill is focused on changes to the Medicaid program. It ends the ACA expansion for low-income adults and essential health benefit requirements as of the end of 2019, as well as the ACA’s presumptive Medicaid eligibility provisions and disproportionate share hospital payment reductions. The bill establishes a per-capita cap approach to funding state Medicaid programs beginning with fiscal year 2019.” In addition, he wrote, “The bill would establish a ‘State Innovation Grant and Stability Program,’ beginning in 2018. States could use funding from this program for a variety of initiatives such as high risk pools, reinsurance programs, programs to subsidize providers for direct provision of care or to reduce cost sharing, or programs to promote access to preventive services.” In addition, Jost covered in his analysis such elements as a new continuous coverage requirement for individuals, as well as a repeal of the individual mandate to purchase health insurance, as well as other tax-related provisions of the ACA.

“The biggest question posed by the draft,” Jost wrote, “is how Congress proposes funding it. The bill would give up all of the taxes that funded the ACA, yet would provide tax credits, albeit less generous than the ACA’s, to millions of additional individuals. The only real revenue in the bill is the tax on generous employer plans. It simply does not seem to add up, but the CBO [Congressional Budget Office] will soon tell us whether it does or not.”

Given that the Republicans in Congress have agreed to pursue the path of budget reconciliation for whatever legislation they will be introducing, that question of funding becomes a challenging and vexing one. An excellent analysis of some of the hurdles involved in that context, was published on Dec. 13, on the Brookings Institution’s website, and authored by Alice M. Rivlin, Loren Adler, and Stuart M. Butler.

In the meantime, public opposition is building to any repeal of the ACA that might endanger some key forms of insurance coverage. That was referred to on Tuesday in a morning telephonic press conference sponsored by Health Access California, a statewide healthcare consumer advocacy organization in the Golden State.

At the outset of the press conference, Anthony Wright, executive director of Health Access California, said, “In California alone, the proposal to repeal the ACA would undo coverage for 5 million Californians—over 4 million who get coverage through the ACA’s Medicaid expansion; 1 million who get coverage through Coverage California. Californians have made their concerns heard, from Los Angeles to San Francisco, from Mariposa to Sonora. “While none of the 13 California representatives who support repeal saw fit to meet with their constituents, constituents marched” for retention of the ACA, he noted, adding that, “If Californians were concerned about their [health insurance] coverage last week, this week, they should be alarmed and angry. Far beyond rolling back coverage,” he said, the plan represented by the draft leaked to POLITICO “would roll back the Medicaid expansion in 2020 that 4 million Californians depend on. That represents a multi-billion-dollar cut to us.” And, said Sara Flocks of California Labor Federation, which represents 2 million labor union members and their families, the draft plan’s element that would cap the tax exclusion on employer-sponsored health benefits “may sound complicated, but in reality, it is a massive tax on working people. CBO [the Congressional Budget Office] estimates that workers’ tax liability would increase as much as $3,068 annually,” she said, “for a 23-percent increase in their effective tax rate, for those with incomes up to $250,000, though only a five-percent increase for those with incomes of more than $250,000.”

Meanwhile, administration staff shared with the media broad, general talking points that President Trump plans to touch on in his address to Congress Tuesday evening, but it is not known whether any specific statistics or explicit legislative detail will be presented tonight.

Healthcare Informatics will continue to update readers on this developing story.