GOP leaders provide new details about ObamaCare repeal

Greg Nash

House Republican leaders on Thursday presented to their members the most detailed look yet at their plan to repeal and replace ObamaCare, though some key elements remain to be worked out. 

A packet distributed to lawmakers at the meeting and obtained by The Hill says the GOP bill will include tax credits, an expansion of health savings accounts, money for high risk pools to care for the sick and a major restructuring of Medicaid to cap federal payments.

No dollar figures for any of the Republican proposals have been presented yet. Lawmakers said that is because the Congressional Budget Office is still analyzing the plan.

{mosads}Still, the document circulated Thursday shows progress, with lawmakers getting down to the brass tacks of what an ObamaCare replacement will look like.

The plan calls for a refundable, advanceable tax credit to help people afford healthcare coverage. The tax credit would be based on a person’s age, not their income, in contrast to ObamaCare. Democrats argue that by not taking income into account, this system would fail to give enough help to low-income people, but Republicans say factoring in income discourages work. 

The plan also calls for repealing ObamaCare’s Medicaid expansion “in its current form.” After a transition period, states could choose to keep Medicaid open to the newly eligible people, but they would no longer receive extra federal funding to cover the cost. Instead, states would be reimbursed at the traditional, lower rates. That means states would have to put more money into the program if they wanted to keep the expansion. 

The plan also calls for a “per-capita cap” for Medicaid, which means the traditional, open-ended federal commitment would be converted into a capped payment to states. The amount would take into account the number of people in the program, in contrast to a simple block grant. 

Democrats warn this idea would lead to damaging cuts to Medicaid. Republicans say it is a way to limit federal spending and give more control to states. 

House Republicans also plan to reverse the cuts that ObamaCare made to payments for hospitals serving large numbers of uninsured people, known as Disproportionate Share payments. Bringing back those payments will help states that did not expand Medicaid and are bearing higher healthcare costs because of it.

The plan also calls for repealing “all” of the taxes that pay for ObamaCare. While some lawmakers have called for keeping those taxes in place to provide revenue for a new plan, they appear to have lost that debate. 

Republicans still have a long way to go before their plan becomes law. They need to put dollar figures on the plan and get buy-in from the conference, especially on contentious issues including how to handle the Medicaid expansion.

It is unclear how Republicans will pay for their legislation. House Ways and Means Chairman Kevin Brady (R-Texas) told reporters Thursday that is still being figured out. One option, he said, is to start taxing more generous employer-sponsored health insurance plans, an idea known as “capping the exclusion.”

But Brady said that is not certain. Some lawmakers leaving the meeting Thursday said they were uneasy with that idea, which is politically fraught by opening up new insurance plans to taxation. “I am not comfortable with that at this point,” said Rep. Tom Cole (R-Okla.). 

Importantly, the proposal would immediately repeal the penalties for violating ObamaCare’s individual and employer mandates, making them toothless.

That move could cause serious concern for insurers, who say the individual mandate is crucial for getting healthy people to enroll, balancing out the cost of sicker enrollees.

The CBO has previously found that repealing the mandate would increase insurance premiums by roughly 20 percent. 

– This story was updated at 12:37 p.m.

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