Draft House Republican ACA Replacement Bill Leaked

With Congress set to return to Washington on February 27, a draft of the House legislation to repeal parts of the Affordable Care Act (“ACA”) using the procedure known as budget reconciliation was posted by the Politico news site on Friday. The 106-page measure would eliminate key aspects of the ACA while shifting more responsibility back to the states. Specifically, the bill would repeal the ACA’s individual mandate, subsidies and all of the associated taxes. It would also phase out Medicaid expansion over four years. States could still cover Medicaid expansion costs if they chose, but they would receive less federal funding starting in 2020.

As indicated in last week’s ACA blueprint released by House Speaker Paul Ryan (R-WI), the proposal would end the current open-ended Medicaid entitlement by capping payments to states based on the number of Medicaid enrollees, known as a per capita cap system. In place of ACA subsidies, the House bill would provide tax credits based on age instead of income. For a person under the age of 30, the credit would be $2,000. That amount would double for beneficiaries over the age of 60.

Meanwhile, House Republicans are still trying to reach consensus with their Senate counterparts over the repeal of Medicaid expansion. A number of Republican senators from states that expanded Medicaid want to provide states the option to keep Medicaid expansion and the enhanced federal match. This is the approach set out in the Cassidy-Collins Patient Freedom Act of 2017 (S. 191), which was introduced in late January and to date is the leading Senate ACA replacement proposal.

Another replacement provision in the draft House bill would provide $100 billion in State Innovation Grants to help states subsidize more expensive enrollees. The innovation grants address a portion of the pre-existing condition population but with narrower protections than the ACA. To pay for the replacement, the draft bill proposes capping the tax exemptions for employer sponsored health insurance at the 90th percentile of current premiums. Benefits beyond 90 percent would be taxed on the employer. This is the only “pay-for” provision in the bill and will be strongly opposed by business interests, including the U.S. Chamber of Commerce. Several sources on Capitol Hill have also indicated that the draft bill received a “horrible” score from the Congressional Budget Office (“CBO”), which is responsible for measuring the economic impact of legislation.

The Speaker’s office has indicated they would like to introduce ACA replacement legislation as early as next week, but reaction to the draft bill and a bad CBO score could delay it even further. Once introduced, the House will attempt to pass the legislation through the budget reconciliation process by their informal deadline of April 6. The White House reiterated this week that it intends to unveil its own ACA replacement plan by early to mid-March. The Senate is operating on a slower timeline with the end of 2017 viewed as an informal deadline.

House Chairman Introduced Pre-Existing Conditions Protection Bill

Late last week, House Energy and Commerce Chairman Greg Walden (R-OR) introduced legislation (H.R. 1121) that is intended to ensure that enrollees cannot have benefits excluded from a plan due to a pre-existing condition when the ACA is repealed. The bill was introduced on the heels of Speaker Ryan releasing his outline to repeal and replace the ACA. The pre-existing conditions coverage has long been a favored provision for both Republicans and Democrats.

According to the text, the Pre-Existing Conditions Protection Act of 2017 would not allow insurers to deny individual coverage based on physical or mental health conditions, medical history, genetic information, disability or any other health status determined by the HHS Secretary. The bill would also ensure that individuals could not be charged more based on their health status.

House to Begin FDA User Fee Hearings Next Week

On March 2, the House Energy and Commerce Health Subcommittee will hold its first hearing on reauthorization of the FDA user fee programs. The hearing will focus on the generic drug and biosimilar user fees programs. About half of the FDA’s annual budget is funded by fees paid by drug and device makers and those industry agreements must be reauthorized by the end of the fiscal year (September 30, 2017). The committee will also consider a drug pricing bill meant to encourage drug companies to develop generic medicines amid shortages or absence of competition.

Health-Related Bills Introduced This Week

No health care-related bills were introduced this week as Congress was out of session.

Next Week in Washington

The House and Senate return on February 27 to begin their longest stretch of scheduled legislative work days in 2017. President Trump will deliver his first State of the Union Address to Congress on February 28. Also on the 28th, the House Judiciary Committee will markup medical malpractice legislation. The bill proposes tightening the statute of limitations for malpractice suits, capping damages and restricting attorney fees.