As the incoming Congress and administration develop plans to “repeal and replace” the Affordable Care Act (ACA), analysis of five earlier repeal and replace proposals provides insights into the key features likely to appear in any forthcoming repeal and replace legislation. Manatt Health performed a side-by-side comparison across 19 core areas—including tax credits, Marketplaces, individual and employer mandates, dependent coverage, risk pooling, Medicaid expansion and financing, guaranteed issue and preexisting conditions, ratings, and benefits—of the following five existing proposals:
- Speaker Paul Ryan and the House Republican Caucus’s 2016 proposal;
- Legislation sponsored by House Budget Committee Chairman Tom Price, President-elect Trump’s nominee to lead Health and Human Services;
- A proposal co-sponsored by Senators Orrin Hatch and Richard Burr and Representative Fred Upton;
- A proposal from the Heritage Foundation; and
- The reconciliation bill (H.R. 3762) passed and vetoed earlier this year, noting the areas that were and those that were not addressed in that reconciliation bill. (Many of the excluded provisions are assumed to be outside of the scope of reconciliation.)
The five proposals analyzed range from a 242-page draft of legislation sponsored by Representative Price to an 8-page concept paper published by Senators Hatch and Burr and Representative Upton. Across these different formats there was significant variation in the level of detail, with some proposals providing answers to key policy questions and others merely outlining an approach. Click here to view the full analysis.
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Commonalities and Differences
Despite the differences in the breadth and depth of the proposals, they shared several common features—and had some key differences—on how to modify the ACA’s commercial market reforms. The proposals generally modify or eliminate federal reforms. All proposals revise and reduce the tax credits and federal funding for healthcare coverage, which might limit state choices even in the states that would want to retain some ACA consumer protections.
- Tax Credits. Notably, all proposals analyzed replace the current advanced-payment premium tax credit with a new tax credit, though the proposals diverge on the size of the tax credit and whether to scale by income or other factors.
- Mandates. Each proposal repeals the individual and employer mandates.
- Benefit and Cost-Sharing Requirements. Several proposals would eliminate the federal essential health benefit and actuarial value requirements, returning questions about benefit mandates to the states and, depending on the state response, giving insurers more flexibility in designing products but making comparison shopping more challenging for consumers.
- Rating Rules and Consumer Protections. Across the board, the proposals would largely return authority to the states to oversee their individual insurance markets. All proposals retain ACA-like consumer protections around preexisting conditions and medical underwriting only for those individuals who maintain continuous coverage—but otherwise differ in their approaches to protecting consumers.
While these proposals have many common features on how they approach reforms to the commercial market, they disagree sharply on how to restructure Medicaid. Some would roll back expansion, while others grandfather existing but freeze any new expansions. With respect to Medicaid financing, many proposals favor per capita caps on federal dollars, but they differ considerably on how to structure those caps.
The bottom line: Prior repeal and replace proposals have similar features, but the final approach and myriad details will be determined through the legislative process and through regulations and other executive guidance. Further, how these proposals would interact with existing state laws remains to be seen. Manatt Health will continue to keep you updated as developments emerge.