What we know about the GOP’s healthcare bill
House Republicans are plowing ahead with their plan to repeal and replace ObamaCare, with committee votes likely next week.
While final legislation has yet to be unveiled, an outline and a leaked draft from last month give a general idea of where House Republicans are headed.
Their bill would dismantle the central elements of ObamaCare, including its subsidies to help people afford coverage, its expansion of Medicaid, and its mandates and taxes.
Democrats warn the bill would jeopardize coverage for the 20 million people who have gained it from ObamaCare, while Republicans argue the health law has failed and needs to be replaced with a less intrusive system.
Here are the main things we know so far about the GOP plan.
It is likely to cover fewer people than ObamaCare
Many Republicans acknowledge that their plan is likely to cover fewer people than the Affordable Care Act.
The GOP plan would provide less financial assistance to people, especially those with low incomes, through a tax credit. The GOP plan would also repeal the expansion of Medicaid, at least for people who are not already grandfathered in, starting in 2020. That expansion has provided coverage for about 11 million people.
The smaller tax credit and repeal of the Medicaid expansion, along with a broader plan to restructure Medicaid to cap federal payments, are likely to result in fewer people being covered.
“No question, between the changes in Medicaid and the smaller tax credit for low income people in particular, it’s pretty clear that this bill would cover fewer people than the ACA,” said Larry Levitt, a healthcare expert at the Kaiser Family Foundation.
Republicans say they are not trying to compete with ObamaCare’s coverage numbers, which rely in part on a mandate that forces people to buy coverage or pay a tax penalty.
“We’re not going to send an IRS agent out to chase you down and make you buy health insurance,” Rep. Michael Burgess (R-Texas), the chairman of the Energy and Commerce health subcommittee, said last month. “If the [coverage] numbers drop, I would say that’s a good thing, because we’ve restored personal liberty in this country.”
It would provide less help to low-income people than ObamaCare
ObamaCare bases its tax credits on income, meaning that low-income people get extra help. The Republican plan, in contrast, would provide a tax credit based on age, with older people receiving more money.
A study from the Kaiser Family Foundation last week found that the average tax credit to help people buy insurance would be at least 36 percent lower in 2020 under a leaked House GOP bill or a previous plan from then-Rep. Tom Price (R-Ga.) than under the Affordable Care Act.
Avik Roy, a leading Republican health policy expert, wrote in Forbes that not adjusting financial assistance for income is a “key flaw” in the GOP plan.
“It means that millions of highly vulnerable people — those near the poverty line and those with poor health status — will not receive enough in tax credits to afford the coverage they need,” he wrote.
Republicans argue that giving more assistance to people with lower incomes is a disincentive to work and earn a higher income.
“You don’t get the implicit tax on making more income” under the GOP plan, said Doug Holtz-Eakin, president of the American Action Forum.
It would seek to protect people with pre-existing conditions
The GOP bill would keep the ObamaCare protection that bans insurers from rejecting people with pre-existing conditions — but with a twist.
Insurers would be allowed to charge people 30 percent higher premiums for one year if they have had a gap in their healthcare coverage.
The penalty for going without coverage would be administered by insurers.
It would let the states decide what insurance plans must cover
The GOP proposal would repeal ObamaCare’s federal requirements that insurance plans cover a set of 10 healthcare services, and instead give the power to states to decide which benefits a plan must cover.
Republicans argue that the ObamaCare requirements, known as essential health benefits, drive up the cost of insurance by mandating that plans cover certain items that not everybody wants, like maternity coverage. Democrats warn that repealing the requirements could leave people with skimpy coverage that does not cover important things like prescription drugs or mental health services.
Holtz-Eakin noted that without the essential health benefits, insurers would have more freedom to design a health plan that costs exactly the same amount as the tax credit.
It repeals ObamaCare’s taxes
The GOP plan would repeal all of ObamaCare’s taxes, including the Health Insurance Tax and the excise tax on medical devices.
The plan would be financed through a new tax on generous healthcare plans that people obtain through their employers. Right now, most employer-provided health coverage is exempt from taxation.
Some Republicans are uncomfortable with the idea, viewing it as a new version of the “Cadillac tax” on generous healthcare plans.
Other Republicans say the idea is just moving to equalize the tax treatment between people who get insurance through work and those who don’t.