While Congress was in recess last week, members met with constituents at home. For those senators and representatives who he­­­­ld town hall meetings, the ACA repeal and replace effort was the hot topic. Many constituents expressed concerns about loss of health insurance coverage.

Meanwhile, a new Kaiser Family Foundation survey found that 48 percent of Americans view the ACA favorably, while 42 percent view the ACA unfavorably. A recent Pew Research Center poll of more than 1,500 adults found that 54 percent approve of the ACA, while 43 disapprove.

The week ended with a leaked Republican draft bill to repeal the ACA. This draft bill without a title was dated February 10, 2017, and it would implement principles outlined in the GOP’s policy plan “Obamacare Repeal and Replace; Policy Brief and Resources” that was released on February 16, 2017.

Major provisions of the draft GOP bill include:

  • Medicaid expansion – would give discretion to the 31 states that expanded Medicaid to continue covering individuals enrolled under Medicaid expansion, but by 2020 would not provide extra funding for that population as outlined under the ACA. Instead, states would receive capped payments based on the number of traditional Medicaid enrollees, increased annually by a fixed percentage regardless of increases in medical costs. States would also receive $100 billion over 10 years in state innovation grants to create high risk pools and other mechanisms for insuring individuals with pre-existing conditions, for example.
  • Individual mandate – would eliminate the individual mandate and tax penalties for individuals who do not obtain insurance coverage. Instead, insurers would be allowed to charge individuals who fail to maintain continuous coverage 30 percent higher premiums for a year.
  • Individual subsidies – would eliminate subsidies based on individuals’ income, and instead would provide tax credits based on age (ranging from $2,000 for those under 30 years old, and $4,000 for those over 60 years old). Insurers would be able to charge the elderly up to 5 times as much as younger counterparts, not 3 times as much as is permitted currently.
  • Repeal of taxes that fund the ACA – would repeal taxes on health insurers, pharmaceutical manufacturers, medical devices, tanning operations, and investment income of higher earners. Instead, employees would pay a new tax for employer sponsored insurance at the 90th percentile of current premiums (this was dubbed the “Cadillac tax”) as the sole funding source for the ACA replacement. Additionally, larger employers who do not offer health coverage to workers would no longer be subject to tax penalty.
  • Minimum essential health benefits – would eliminate minimum insurance health benefits by 2020, and would provide states autonomy in regulating benefit levels.
  • Defund the Prevention and Public Health Fund – would defund the prevention and public health fund created under the ACA after 2018.

It is expected that this draft bill will change as it moves through the committees, and once the Congressional Budget Office (CBO) officially scores the bill. CBO’s score will shed light on the bill’s cost, how many people will likely end up uninsured, and the bill’s impact on the federal deficit.

Medicaid Changes under ACA Repeal Efforts

But it is not only individual citizens who are concerned about the implications of an ACA repeal, so are governors and mayors, including several Republican, state leaders. They are wary of the potential shift of financial responsibilities for Medicaid health care services to the states.

Under the ACA, states have the option to expand Medicaid for individuals earning up to 138 percent of the poverty level, or $16,243, annually; the government paid 100 percent of the cost for the expansion through 2016, will pay 95 percent in 2017, and would phase payments down to 90 percent by 2020.

According to the GOP’s policy plan published two weeks ago, “states [would] transition individuals currently enrolled in the Medicaid expansion out of the expansion population into other coverage.”

It is not clear what “other coverage” means, but it would likely be through state-sponsored programs given the low earnings of individuals who qualified under the Medicaid expansion.

The GOP’s plan and the draft bill endorse more state autonomy with regard to spending Medicaid funds; both advocate for states to receive fixed federal sums per beneficiary (capped program) as opposed to Medicaid automatically paying large portion of costs for any services for which a Medicaid beneficiary qualifies (an open program).

Some state leaders and healthcare providers are concerned that the GOP’s efforts to roll back the number of individuals who qualify for Medicaid benefits and the amount of funding for the program will result in less access to care and an increased number of uninsured.

Republican Governor John Kasich of Ohio met with President Trump last Friday to discuss how to keep Medicaid expansion. Like President Trump’s pick for Centers for Medicare and Medicaid Services (CMS) administrator, Seema Verma, who implemented a nominal fee requirement for Medicaid beneficiaries in the Healthy Indiana Plan, Gov. Kasich would like to do the same to help pay for the Ohio Medicaid program.

Medicaid Changes in General

At her Senate Committee hearing, Ms. Verma stated that she will “work toward ushering in a new era of state flexibility and leadership” to implement Medicaid program changes.

And according to reports, certain states would like to change Medicaid rules in general: Maine desires to limit Medicaid beneficiaries to five years of benefits; Kentucky and Arkansas want to require Medicaid beneficiaries to work; and Wisconsin would like its Medicaid beneficiaries to take drug tests.