Republicans showing their hand on ACA ‘replacement’

Draft health care legislation would slash coverage expansion and subsidies

LATE LAST WEEK, Politico released a leaked 105-page draft bill defining the House Republican plan to repeal/replace/repair/re-whatever the Affordable Care Act/Obamacare. The draft legislation was dated February 10, so likely it’s already out of date, though it is the best indication yet of their rapidly evolving intentions and fits with many of their prior recent proposals. So a big GOP move is getting close, and it’s not good. What’s important?

First, the ACA’s generous coverage expansion (for many, not all) through Medicaid expansion and private insurance subsidies would be drastically curtailed, leaving most of the 22 million who got either form of coverage without an affordable option.

Second, not only is the ACA Medicaid expansion repealed by 2019 (11 million people and counting), the plan would replace current Medicaid financing with a “per capita cap” by 2019, shrinking funding by hundreds of billions, perhaps more, over 10 years.

Third, lower and lower-middle income Americans who would lose Medicaid or private subsidies would be eligible for drastically reduced tax credits resembling a 6-foot ladder to escape a 12- foot hole, only varying by age. Those under 30 would get a $2,000 credit and those over 60 would get $4,000 – with other age groups qualifying for credits of $2,500, $3,000, and $3,500.

Fourth, standard national benefits in the ACA, called Essential Health Benefits, would end by 2020, including guaranteed coverage for prescription drugs, mental health and substance abuse services, maternity care, and more. States could set minimum benefits if they chose to.

Fifth, the bill eliminates the ACA’s tax hikes on wealthy households, drug-insurance-medical device companies, and tanning salons. Repealing the wealth taxes, especially on unearned income, would make this one of the biggest tax cuts for high income families ever, as low and lower middle income families lose support for health insurance.

Sixth, the one silver lining, House Speaker Paul Ryan’s stated intention to resurrect preexisting condition exclusions and medical underwriting for tens of millions of Americans who would be unable to maintain “continuous coverage” for at least 62 days is laid aside in favor of a one-year late enrollment penalty of 130 percent of the premium cost. Far better than his original idea, and far more punitive and expensive, by the way, than the ACA’s individual mandate. Much more is included and well-summarized in health care expert Tim Jost’s Health Affairs blog post on the leaked draft legislation.

In the next week or so, the Congressional Budget Office will release estimates on cost and coverage impacts. Their estimate will provide the essential frame for the upcoming debate. Ryan and his team are determined to push this bill through the process as rapidly as possible.

This proposal, or something like it, likely will appeal to the House “Freedom Caucus” right-wingers. Whether the turbulent town meetings of the past month will have any impact on less conservative House Republicans is unclear. Ryan can afford to lose 20 votes from his Caucus, assuming no Democrats vote aye.

An all-important wild card are the nation’s governors, especially the 33 Republicans, 16 of whom lead states that expanded Medicaid under the ACA. Democratic governors will oppose the Medicaid rollback and financing changes, though, as Vox’s Sarah Kliff explains, Republican governors are open to a deal. For more from intrepid Sarah Kliff, see this “Governors-Only Discussion of Health Care Reform” prepared by Avalere Health.

If Ryan wins the House, far less sure is the Senate, where Republicans can lose only 2 of their 52 votes, and Alaska’s Lisa Murkowski has said no to cutting Medicaid and Planned Parenthood funding, both of which are in Ryan’s plan. Maine’s Susan Collins says she will reject any bill repealing Planned Parenthood funding. About 10 other Republican senators are waffling. Also, the Senate’s arcane reconciliation rules may jettison more than a few items on Ryan’s list.

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What of Mr. Trump? His earlier statements about being a different kind of Republican when it comes to health care is a distant memory now: “I am going to take care of everybody. I don’t care if it costs me votes or not. Everybody’s going to be taken care of much better than they’re taken care of now.” The prospect to preserve key ACA elements appears ominous in the House and less so, though uncertain, in the Senate. The White House will cheer whatever they get from the Congress.

My Harvard colleague Michael Reich notes that the acid test for any national health reform, around the globe, is whether it can survive a change in national administration. Despite the many life-threatening episodes the ACA has faced since its signing in 2010, the existential threat to US health reform is now. This is our moment of truth and the acid test. If you care to participate in defending the ACA, there is no better way than to join the resistance, a new American movement called “Indivisible.” Check it out and give it a shot.

John E McDonough is a professor of practice at the Harvard TH Chan School of Public Health. He blogs at