February 16, 2017

GOP Leadership Shares ACA Replacement Ideas

Holland & Knight Healthcare Blog
Lisa Hawke | Miranda A. Franco

A highly anticipated healthcare meeting was held on Feb. 16, 2017, where GOP leadership provided Congress with a 19-page brief to review over the upcoming recess. The meeting included presentations from leaders of key House committees and HHS Secretary Tom Price, and it was intended to give lawmakers more details ahead of a week-long recess where many of them will be meeting constituents eager for details on what will replace the healthcare law they have pledged to repeal.

What the Brief Says

  • Eliminates (over transition) higher match for Medicaid expansion population
  • Creates a portable, refundable tax credit that is not income dependent, but is age rated.  It grows over time and includes kids up to 26. It is for everyone not otherwise eligible for insurance another way, such as an employer sponsored plan. This is the health care "backpack" tax credit that has been discussed.  This can be used by individuals to purchase any plan approved by the State, but not for plans that cover abortions.
  • Repeals all the taxes in the Affordable Care Act (ACA) – medical device, pharma, health insurance, etc.
  • Creates per capita allotment under Medicaid based on four categories (aged, blind/disabled, adults, kids) multiplied by the number of enrollees in each group. The per capita allotment for each group is determined by each individual state’s average Medicaid spending in a base year (undefined) and inflationary index. Disproportionate Share Hospital (DSH) and administrative payments are excluded
  • Allows states to choose a block grant instead, but has certain mandatory populations; vulnerable elderly and disabled must be included, but not children
  • Repeals Medicaid DSH cuts entirely
  • Provides State Innovation Grants – which they call the "next generation" of high risk pools
  • Enhances health savings accounts, but seems to keep the tie to high deductible plans

ACA Repeal Timeline

The President stated last week that it could take until next year for an ACA replacement plan to be ready. House Ways and Means Committee Chairman Kevin Brady (R-TX) and House Energy and Commerce Health Subcommittee Chairman Michael Burgess, M.D. (R-TX) both confirmed that they will complete a reconciliation measure within 30 days. Speaker of the House Paul Ryan (R-WI) clarified that the President was referring to the amount of time it would take to implement a replacement plan, and made assurances that repeal and replacement will be completed this year. Republicans hope to pass a reconciliation bill that will repeal the law and contain some elements of a replacement by March. A series of smaller replacement bills could follow at a later point. Lawmakers are currently working with the Congressional Budget Office (CBO) on which parts of a replacement plan could be included in the reconciliation repeal bill.

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