House Republicans unveil Obamacare replacement plan

House GOP releases plan to repeal and replace the Affordable Care Act.

March 6, 2017, 10:13 PM

— -- House Republicans on Monday night unveiled their plan to repeal and replace the Affordable Care Act (ACA) -- former President Obama's signature healthcare legislation -- years after the measure was signed into law and several weeks into Donald Trump's presidency.

The plan, released by the Ways and Means Committee and the Energy and Commerce Committee, outlined the Republican strategy for following through with their 2016 campaign promise to repeal and replace the legislation, known as Obamacare. The committees are set to vote on the measure Wednesday morning.

President Trump has railed against the Affordable Care Act, calling it a "horrible disaster" and a "lie" and made its replacement a top priority.

The GOP plan dumps the ACA's individual mandate, creates a system of tax credits to provide access to care and freezes Medicaid expansion beginning in 2020.

It also allows insurers to increase premiums on those who have gone without insurance for a period of time.

In a statement, House Speaker Paul Ryan lauded the American Health Care Act as "a plan to drive down costs, encourage competition, and give every American access to quality, affordable health insurance."

But the plan keeps two major provisions of the ACA in place, such as provisions for not denying care for pre-existing conditions and allowing people under 26 to stay on their parents' insurance.

Monday night, Democrats were quick to criticize the plan. Democratic leader Nancy Pelosi, D-California, called it the “Make America Sick Again” bill in a statement. Pelosi, like other congressional Democrats, slammed the bill for defunding Planned Parenthood and halting the expansion of Medicaid.

But it’s not just Democrats who are concerned about the proposed legislation—the bill also faces an uphill battle with members of the Republican Party, even as they control the House and Senate. Today, four Republican Senators sent a letter to Senate Majority Leader Mitch McConnell saying that while they support plans to replace Obamacare, they will not support any bill that doesn’t protect state expansions to Medicaid.

Reaction from the White House was measured. "Today marks an important step toward restoring healthcare choices and affordability back to the American people," said press secretary Sean Spicer. "President Trump looks forward to working with both Chambers of Congress to repeal and replace Obamacare."

What the bill does:

The bill immediately eliminates the individual mandate from the ACA, which requires people to obtain health insurance or face a penalty. Over the next three years, Obamacare taxes, penalties, and subsidies will be repealed.

However, insurers will have the option of charging a 30 percent assessment on individuals who fail to maintain continuous coverage.

The legislation creates a tax credit system to help Americans purchase health insurance, but in a concession to conservatives, House republicans added an additional cap on those credits.

The tax credits will work by creating five age brackets with differing amounts of available credits. People who make $75,000 or less, or make $150,000 or less as joint filers, receive the full tax credit according to their age bracket. For every thousand dollars people make more than that, they get $100 less in tax credits. Each person in a family is available for a tax credit, up to $14,000 per family.

Around 2025, the plan would temporarily reinstate the so-called “Cadillac Tax” on high-cost plans to avoid running afoul of an arcane budget rule that prohibits Senate reconciliation bills from increasing the deficit beyond the first 10-year window of its enactment.

Despite opposition from Senate Republicans who said they will not support a bill that doesn’t protect state expansions to Medicaid, the House plan freezes Medicaid expansion starting on Jan. 1, 2020, the day the new age-based tax credits will be instated.

Those currently enrolled in Medicaid or who will join the government program that provides medical coverage to low income families and individuals will be grandfathered in.

State funding for Medicaid will be allotted per capita, based on the number of enrollees in Medicaid populations like children, people in nursing homes, people with disabilities and pregnant women. States will also have access to a new $100 billion-Patient and State Stability Fund to help low-income patients afford healthcare.

The bill also gets rid of government funding for Planned Parenthood. The White House proposed preserving federal funding for Planned Parenthood on the condition that it ends its abortion program, but their offer was rejected.

What it does not change:

The bill keeps in place two of the most popular Obamacare provisions: those with pre-existing conditions cannot be denied coverage, and young people can stay on their parent’s health insurance plans until they reach the age of 26.

What we don’t know yet:

The cost and number of people who could lose insurance is still unclear. The bill has not yet been scored by the Congressional Budget Office, a nonpartisan congressional research office that provides guidance on economics and the budget for Congress.

The CBO's guidance will provide information about how many Americans could potentially lose their coverage and the full cost of the bill.

This piece of legislation maintains exemptions that employer-plan premiums currently enjoy, but Republicans predict that they will still be able to save money from tax refunds from the repealing of ACA spending and taxes.

Despite these unknowns, the House Ways and Means and Energy and Commerce Committees are prepared to vote on the legislation this week, before they’re given cost estimates from the CBO, a move that is likely to receive criticism from members on both sides of the aisle.

What's the reaction:

Senators Rob Portman, R-Ohio, Shelley Moore Capito, R-West Virginia, Cory Gardner, R-Colorado, and Lisa Murkowski, R-Alaska, wrote, “We believe Medicaid needs to be reformed, but reform should not come at the cost of disruption in access to health care for our country’s most vulnerable and sickest individuals.”

Republican congressman from Michigan, Justin Amash, tweeted that the new bill is “Obamacare 2.0.” It’s a sentiment shared by Sen. Rand Paul (R-Kentucky) who has asked for a ‘clean replace’ the same day as a repeal of Obamacare, and criticized the House committee’s lack of transparency when drafting the bill. Earlier this week he went on a Capitol Hill hunt to find a copy of the draft, hidden by committee staffers.

But during an appearance Monday night on Fox News, the chairmen of the two House Committees responsible for drafting the legislation, Rep. Kevin Brady (R-Texas) from the House Means and Ways Committee, and Rep. Greg Walden (R-Oregon) from the House Energy and Commerce Committee, said they are confident the bill will pass in Congress and dismissed criticism from their own party that it’s “Obamacare-lite.”

"It is Obamacare gone because repeal those taxes, the mandates, subsidies--there is nothing left. Instead, we give them the same tax break we give workers at big businesses. We give that same tax help to small business people,” said Brady.

“I'm confident we are going to pass it and deliver on President Trump’s promise to repeal and replace.”

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