House Republicans Make Progress on ACA Repeal and Replacement

On March 6, House Republicans released their long-awaited budget reconciliation package, the American Health Care Act, which is intended to repeal and replace significant portions of the Affordable Care Act. Two days later, the House Energy and Commerce and Ways and Means committees conducted epic markup hearings where debate and votes on various amendments lasted for 27 hours and 18 hours, respectively. The resulting bills, which passed on party lines, will now go to the House Budget Committee where they will be combined into a single measure and sent to the full House for a vote. Once the bill has passed the House, it will move to the Senate where its fate is unknown.

The measures passed by the House committees this week both leave in place a number of current ACA provisions, such as the requirements that health plans cover preexisting conditions, guarantee availability and renewability of coverage, cover adult children up to age 26 and cap out-of-pocket expenditures. Other elements include:

  • Transitioning federal Medicaid funding to a per-capita cap basis by 2020;
  • Repealing Medicaid DSH cuts in non-expansion states in 2018 while keeping the same cuts in effect in expansion states until 2020;
  • Repealing a host of ACA-related tax provisions, including the medical device tax, individual and employer mandates, Medicare tax on high-income earners, health insurance tax, tanning tax and, in 2025, “Cadillac” tax on certain health insurance plans;
  • Replacing ACA subsidies with age-based tax credits ranging from $2,000 to $4,000. The credits would begin phasing out for people who make more than $75,000 as individuals and $150,000 as a household. They would disappear completely for individuals who earn more than $215,000, with a cap of $290,000 for households; and
  • Providing $100 billion over 10 years to help states subsidize high health insurance costs.

Once the bill passes the House, Senate Majority Leader Mitch McConnell (R-KY) has pledged to bring it straight to the Senate floor for a vote. However, many in his caucus have made clear they will not support the measure in its current form. Conservative Republican senators oppose any delay in the full repeal of Medicaid expansion while moderate Republican senators, especially those from states that expanded Medicaid, oppose any repeal of Medicaid expansion. Additionally, a number of influential outside groups have come out in opposition to the House legislation, including the AHA, Federation of American Hospitals, AMA and several conservative think-tanks.

HHS Secretary Tom Price said this week that the House bill represented only the first part of a three-part process for repealing and replacing the ACA. The second part would consist of significant regulatory actions from HHS while the third is additional legislation Congress would attempt to enact addressing components that cannot be included in the current bill because they do not impact the federal treasury. However, given the increasing opposition and that coverage estimates and the cost of the bill have yet to be released by the Congressional Budget Office (“CBO”), debate over the measure could continue well past the April 6 “soft” deadline the White House has set for President Trump to sign the legislation into law.

Section-by-section summaries of the Energy and Commerce and Ways and Means bills can be found here and here.

Health-Related Bills Introduced This Week

Rep. Joe Courtney (D-CT) introduced a bill (H.R. 1421) to amend Title XVIII of the Social Security Act to count a period of receipt of outpatient observation services in a hospital toward satisfying the three-day inpatient hospital stay requirement for coverage of skilled nursing facility services under Medicare. A companion measure was introduced in the Senate by Sen. Sherrod Brown (D-OH).

Rep. Susan Brooks (R-IN) introduced a bill to provide states flexibility with respect to providing coverage for non-emergency transportation under Medicaid.

Next Week in Washington

The CBO is expected to release its coverage and cost estimates for the House health care reform bill on Monday. On March 15, the House Budget Committee will meet to merge the two existing measures into one bill, and the White House is expected to release its annual budget request to Congress.