WASHINGTON — President Donald Trump and House Speaker Paul Ryan have been barnstorming Congress to repeal and replace the Affordable Care Act (ACA), also known as “Obamacare,” with their own prescription for health care reform: the American Health Care Act (AHCA).

But the GOP replacement plan has already generated concerns over its scoring from the Congressional Budget Office (CBO) that indicates it would lead to millions more uninsured, make medical care more expensive for older Americans, and cut deep into Medicaid, the federal health insurance program relied upon by many low-income Americans.

The CBO estimated that the AHCA would see 14 million more uninsured almost immediately. It would reduce the deficit by $337 billion by 2026 and eventually reduce the cost of premiums, but lead to 24 million fewer insured people than under the current law.

The AHCA was introduced into the House March 6 and is the first phase of the Speaker’s plan for reforming the health care system. The legislation is designed for the Senate’s rules that bypass its normal debate procedures by requiring a simple 51-vote majority vote on budget bills.

The second and third phases of Ryan’s plan will be individual pieces of legislation to allow health insurance companies to offer their products across state lines and reform the legal system to limit the exposure of doctors and hospitals to malpractice suits.

Ryan has signaled that the AHCA will have a floor vote in the House by March 23. While the speaker has pledged certain fixes in response to the CBO estimates, the CBO will not have time to revise its economic forecasts by the time the House votes.

“The goal here is to get to a bill that can pass, that we can pass and actually is great policy, and the president is playing a very constructive role on this,” Ryan said at a media conference, adding he and the president had been working “hand in glove” to make good on seven years of Republican promises to repeal and replace the Affordable Care Act.

Ryan will need 216 votes in order to pass the legislation through the House. No Democrats are expected to sign on board the legislation.

 

Ryan’s Bill

Ryan’s bill retains several elements of the Affordable Care Act: Dependents would be covered until age 26, there would be required coverage of pre-existing conditions, a ban would be placed on annual or lifetime limits on coverage, and the 10 essential covered benefits would be in place.

The bill also repeals the employer-insurance mandate and a host of other taxes on health plans and medical devices under the ACA. It abandons the unpopular individual mandate, but allows insurers to slap on a 30% surcharge for a year on people who lapse in continuous coverage.

It expands health savings accounts by almost doubling the pretax dollars that individuals and families can set aside for their health care costs.

But AHCA also allows health insurers to charge older plan recipients five times as much as they charge younger customers, whereas under Obama’s Affordable Care Act they are only able to charge three times as much.

At the same time, it replaces the Affordable Care Act’s tax credit scheme, which assisted Americans with deductibles and premiums based on a sliding scale formula according to income need, with tax credits based on age.

Individuals under 30 would receive a $2,000 tax credit, and those over 60 would receive a $4,000 credit — with subsidies being gradually reduced for incomes above $75,000 (or $150,000 for a family).

However, the biggest changes under the AHCA have to do with Medicaid. Under the ACA, 31 states expanded Medicaid to serve populations within 138% of the poverty level, so the program now serves 75 million adults and children in the U.S.

Ryan’s bill first proposed a Medicaid reform that would not only roll back the expansion in 2020, but transition the entire program to a system where the federal government would give a fixed “per-capita allotment” of Medicaid dollars for states.

However, on Fox News Sunday, Ryan confirmed he would be submitting a final amendment that would create fixed block grants for Medicaid to states, boost tax credits for lower income Americans and older Americans, and add a work requirement for some Medicaid recipients.

“We’re making sure that we get all the language right,” he said.

 

Bishops Set Out Catholic Framework

The U.S. Conference of Catholic Bishops is studying the American Health Care Act, but made clear its moral criteria in a March 8 letter to congressional leaders, stating that any health care reform must respect human life and dignity, honor conscience rights, ensure universal access for all, including for those left out of the Affordable Care Act, be truly affordable, and be comprehensive and of high quality.

Bishop Frank Dewane of the Diocese of Venice, Florida, and chairman of the USCCB’s Committee on Domestic Justice and Human Development, told the Register that the bishops’ conference has set out the moral criteria and key areas of concern to help lawmakers as they search for the right policy prescriptions.

On the one hand, the bishop said the USCCB agrees with the life protections: The Republican Party health care reform would bar the use of tax credits toward health plans that cover abortion and eliminate Planned Parenthood’s access to federal funding so long as it remains an abortion provider.

He added that the conference also likes the increase in health savings accounts that could also help families.

At the same time, Bishop Dewane said that they are also concerned fewer millions of people, not more, would have health insurance under AHCA. The conference is also concerned about the potential cuts in Medicaid affecting the access of poor and low-income Americans to health coverage.

The bishops, he added, would also like to see conscience protections enshrined in the bill, so that health care providers do not have to be worried about regulations that may make it impossible to practice medicine according to their religious beliefs.

“No one should be left without the ability to see a doctor and get quality care when needed,” he said.

On behalf of the USCCB, Bishop Dewane sent an official letter March 17 to House members, specifically assessing the draft AHCA. The letter praised the bill’s pro-life provisions, calling such provisions “a key moral requirement for our nation’s health care policy.”

But the letter also noted “serious flaws” in the bill, particularly the changes to Medicaid, which Bishop Dewane said would leave many “struggling families … without clear indication of affordable, adequate coverage to replace their current options.”

 

Medicaid Changes

Jonathan Oberlander, chairman of the Department of Social Medicine at the University of North Carolina-Chapel Hill, told the Register that the Affordable Care Act has a mixed record of “substantial achievement and significant problems.”

However, he saw the AHCA as “half a step forward and six steps back.”

“It takes Obamacare’s problems, makes them much worse, and reverses its achievements,” he said.

Oberlander explained the ACA did not have sufficient subsidies for middle-income Americans, and the Republican bill has aspects that help people in that range. But the problem is that it does so by taking government assistance away from low-income and modest-income Americans, either by cutting Medicaid or the subsidies and shifting it to Americans who are comparatively better off.

Oberlander said that if the CBO is correct, and if there are substantial increases of uninsured, hospitals and physicians will have more uncompensated care and feel the financial impact, with those serving more indigent areas being worse off.

“The more people insured, the more paying customers they have,” he said.

The problem for doctors and hospitals serving poorer areas, particularly rural parts of the country, is that states will not be able to make up the CBO’s projected loss of $880 billion in federal funding over a decade. Their choices will be limited, and one of them will be “paying providers less,” Oberlander predicted.

 

More Changes Likely

The American Health Care Act is likely to change further after the House passes its version.

Joseph Acosta, a health policy analyst for the Washington-based American Enterprise Institute, told the Register any changes made to the bill to accommodate the most conservative members of the GOP House caucus, such as ending the Medicaid expansion by 2018 instead of 2020, would not survive the Senate.

Senate Majority Leader Mitch McConnell, R-Kentucky, confirmed to reporters that the Senate will take up the House legislation directly on the floor. This means that any amendments to the legislation under the reconciliation process will be only amendments allowed by McConnell and designed to secure the support of at least 50 Republicans, with Vice President Mike Pence casting a tie-breaking vote if required.

“Either the Senate fixes it, or the Senate lets it die,” Acosta said.

Once the Senate passes its version of the bill, Ryan and Trump are likely to pressure House Republicans to vote and pass that version, or run the risk of being labeled as responsible for keeping the Affordable Care Act the law of the land.

Acosta said that the bill’s current form shows fewer people will be covered. Part of that would be due to people dropping ACA plans where the premiums were cheaper than paying the fine, but whose deductibles were so high as to be relatively worthless as insurance. However, AEI’s analysis of AHCA contends that the bill’s 30% surcharge over the course of a year does not add up to enough of an incentive for people to remain continuously insured and will upset the health insurance market unless it is extended or other mechanisms are sought.

Acosta told the Register that Ryan’s formula for the subsidies is right now tied to income in a way that doesn’t make sense in every place: In the suburbs of Washington and New York, making $150,000 per year could be lower-middle class, whereas in Iowa most people with that income would be regarded as rich.

But overall, the subsidies are less generous for those who are low income.

“Clearly, if you’re low income, you need more help to buy insurance,” he said. “But this bill doesn’t do that.”

 

Navigating Choppy Waters

The American Health Care Act will have to navigate through competing factions in the GOP caucus, which are very different in the House and the Senate, in order to get to Trump’s desk.

Matthew Green, political science professor at The Catholic University of America and author of The Speaker of the House: A Study of Leadership, said Ryan has to satisfy centrist Republicans who are concerned about the bill’s impact on the uninsured and peal off enough support from his right-most flank, the 30 members of the Freedom Caucus, which feels the bill does not go far enough.

“It’s not clear that either of those entities are going to give,” he said.

At the same time, Green said Speaker Ryan cannot afford his bill to have no chance of passing the Senate, where Republicans only have 52 seats. The GOP cannot afford to lose three Republican votes.

In advance of the March 23 House vote, President Trump held a closed-door meeting March 21 on Capitol Hill with the House GOP conference, lobbying for their support and warning of potentially disastrous political consequences for Republicans who didn’t back the bill.

“I honestly think many of you will lose your seats in 2018,” Trump told the GOP lawmakers, Politico reported.

Trump delivered his message hours after Republican House leaders made a number of changes to the bill at Trump’s request, in order to win the support of GOP holdouts. According to Politico, the changes include “perks for restive conservatives who wanted optional work requirements and block granting in Medicaid, as well as a potential olive branch to wary centrists who demanded more help for older Americans to buy insurance.”

 

Peter Jesserer Smith is a Register staff reporter.