Source:  Nonpartisan Kaiser Family Foundation

FedWeb Health Care Blogs

Developments on “Repeal-and-Replace,” CSR subsidies/litigation, and related issues

  • April 20, 2017: Revised GOP Repeal-and-Replace Plan: that would allow States to opt out of the requirement to cover all persons with pre-existing conditions, and the requirement that all health insurance plans provide essential health benefits.
  • March 30, 2017:  According to the AP, House Speaker Paul Ryan says the House Republican lawsuit against Obamacare’s cost-sharing reduction subsidies will go forward, but the Trump administration can use its “discretion” to keep paying the subsidies until the lawsuit is resolved, which Ryan said could take “months.”  On May 12, 2016, a federal judge ruled that Congress had not appropriated funds for the payment of cost-sharing subsidies. That ruling has been stayed while the case is on appeal to the U.S. Court of Appeals for the D.C. Circuit.  (See May 12, 2016 below.)
  • March 24, 2017:  Lacking sufficient votes for passage, congressional leadership withdraws the American Health Care Act.
  • March 23, 2017:  CBO releases an updated cost estimate for the American Health Care Act showing little net change in health insurance coverage (still 14 million more uninsured in 2018 and 24 million in 2026), but less deficit reduction ($168 billion, instead of $337 billion) due in part to lowering the threshold for allowable deductions of medical expenses by taxpayers who itemize, as well as a net reduction in projected Medicaid savings due to some modifications.
  • March 22, 2017:  Nonpartisan Tax Policy Center releases analysis of American Health Care Act (“TrumpCare”).
  • March 16, 2017:  House Budget Committee packaged the legislative language reported by the Ways & Means and Energy & Commerce Committees into a single Budget Reconciliation Bill (a ministerial function of the Budget Committee).
  • March 13, 2017:  CBO (Congressional Budget Office) and JCT (Joint Committee on Taxation) released their nonpartisan Analysis of the GOP Repeal and Replace Legislation (“American Health Care Act”) finding that: (1) in 2018, 14 million more people would be uninsured rising to 24 million by 2026 , with the increase resulting from cuts in Medicaid, repealing the penalties associated with the individual mandate, and people not being able to afford higher premiums.; and (2) enacting the legislation would reduce federal deficits by $337 billion over 10 years, with the largest savings coming from reductions in outlays for Medicaid and from the elimination of the Affordable Care Act’s (ACA’s) subsidies for health insurance, and the largest costs under the legislation would come from establishment of a new tax credit for health insurance and lost revenues from repealing taxes including the increase in payroll taxes and net investment income for high-income taxpayers and annual fees imposed on health insurers. The analysis notes that under the legislation, premiums would go up substantially for older people, and down for younger adults, because the legislation would allow insurers to charge 5 times more for older enrollees than younger ones.
  • March 9, 2017:  Committee on Ways and Means and Committee on Energy and Commerce vote to report legislation to repeal and replace the Affordable Care.
    Ways and Means Committee press release     Energy and Commerce Committee Press Release
  • March 8, 2017:  The Hill:  Battle Erupts Over “Trumpcare”
  • March 8, 2017:  FedWeb Blog on House GOP repeal-and-replace legislation
  • March 6, 2017:  House Republicans release legislation to repeal and replace the Affordable Care Act.
    Ways and Means Committee Print
    Ways and Means Section by Section Summary
    Ways and Means Two Page Summary
    Energy and Commerce Committee Print
    Energy and Commerce Section by Section Summary
  • March 3, 2017:  CBO releases new estimates on cost of the Affordable Care Act, which shows the cost of insurance coverage provisions dropping substantially compared to original projections.
  • Feb. 24, 2017:  Obamacare repeal-and-replace leaked House draft
  • Feb 21, 2017:  House of Representatives and the Trump administration Justice Department filed a joint motion in House v. Price (formerly House v. Burwell) asking the court to continue to hold the case in abeyance “with status reports due every three months beginning May 22, 2017.” The motion stated further, “The purpose of the abeyance is to allow time for a resolution that would obviate the need for judicial determination of this appeal, including potential legislative action.”
  • Feb. 16, 2017:  House Republicans released a brief outline of their plan to “repeal and replace” the Affordable Care Act that calls for:  eliminating the health insurance mandate and federal standards for insurance coverage;  replacing health insurance subsidies with monthly refundable tax credits and an expansion of tax-preferred health savings accounts; and repealing the expansion of Medicaid for “able-bodied adults” while capping federal Medicaid payments to States, in an effort to cut projected Medicaid expenditures. The outline includes a goal of “protecting patients with pre-existing conditions,” although details are unclear. Tax credits would not be available to pay for any insurance plans that cover abortions. Taxes enacted to pay for Affordable Care Act subsidies would be repealed without details on how refundable tax credits would be paid for.
  • Feb 7, 2017:  CRS Report:  Recent legislation to Repeal, Defund or Delay the Affordable Care Act
  • May 12, 2016:  A federal district court ruled on May 12, 2016, that the US Congress did not appropriate funds for the Affordable Care Act’s cost-sharing reduction (CSR) subsidies, and enjoined the government from making CSR payments to health insurance issuers. The court stayed the decision pending an anticipated appeal to the US Court of Appeals for the District of Columbia Circuit.  Background:  The Affordable Care Act requires insurers that cover marketplace enrollees to reduce cost sharing for enrollees with incomes not exceeding 250 percent of the federal poverty level; and requires the Department of Health and Human Services to reimburse the insurers for the cost-sharing reductions. On November 21, 2014, the House filed a lawsuit in the U.S. District Court claiming the cost-sharing reduction (CSR) subsidies were in violation of the Constitution because Congress had not appropriated funds for them.  The Administration challenged the lawsuit claiming that the House had no legal standing to sue, and asked for the lawsuit to be dismissed. On September 9, 2015, the judge ruled that the House did have standing to pursue the claim that the Administration was violating the Constitution by paying cost-sharing subsidies without an appropriation. On May 12, 2016, the judge issued a decision on the merits, holding that Congress had not appropriated funds for the payment of cost-sharing subsidies. That ruling has been stayed while the case is on appeal to the U.S. Court of Appeals for the D.C. Circuit.”  Read the full CRS Report   Additional Background and Analysis

Key Provisions of the 2010 Affordable Care Act (“ObamaCare”)

ObamaCare in a Nutshell:  (1) significant expansion of federal funds for the federal-state Medicaid program which provides healthcare to low-income Americans; (2) sizeable subsidies for low- and middle-income Americans to purchase private health insurance; (3) prohibiting insurance companies from denying coverage due to pre-existing conditions;  (4) requiring insurance companies to cover children through their parents’ insurance plans until age 26; (5) require all insurance plans to provide essential benefits; (6) protect people with chronic and acute conditions, by banning lifetime caps on benefits; (7) in order to make the coverage expansion financially viable, established mandates for large employers and individuals requiring that insurance be purchased or a penalty paid; and (8) offsets  federal government costs through new revenues, Medicare, and Medicaid reforms.  Details follow:

  • No Discrimination against Preexisting conditions:  Prohibits insurance companies from denying coverage or charging higher premiums due to preexisting conditions (aka “guaranteed issue at community rates”)   Excellent explanation of why coverage of Preexisting Conditions requires that everyone have insurance.
  • No Lifetime Limits on Benefits:  To protect people with chronic and acute conditions, insurance plans are prohibited from capping lifetime benefits.
  • Medicaid Expansion for Low-Income Americans:   Individuals and families below 133% of poverty ($33,534 for a family of 4) are entitled to Medicaid health coverage, which charges no premiums.  Available in States that have accepted the federally-funded Medicaid expansion. Applies to citizens and legal immigrants.
  • Premium Subsidies for Low- and Middle-Income Americans: For individuals and families above the Medicaid threshold and up to 400% of poverty ($97,200 for a family of 4), federal income-based subsidies are provided for premiums and cost-sharing.  Applies to citizens and legal immigrants.
  • Essential Health Benefits: requires non-grandfathered health plans in the individual and small group markets to cover essential health benefits, which include items and services in the following ten benefit categories: (1) ambulatory patient services; (2) emergency services; (3) hospitalization; (4) maternity and newborn care; (5) mental health and substance use disorder services including behavioral health treatment; (6) prescription drugs; (7) rehabilitative and habilitative services and devices; (8) laboratory services; (9) preventive and wellness services and chronic disease management; and (10) pediatric services.
  • Individual Mandate to Broaden the Insurance Base:  Similar to the requirement that all drivers purchase auto insurance so that costs can be spread over a large pool of insured, the ACA requires most U.S. citizens and legal residents to have health insurance or pay a penalty.
  • Employers with 50 or more employees must offer coverage to employees — or pay a penalty of $2000 – $3000 per employee to help cover the cost of the Federal subsidies.
  • Small Employers (25 or fewer) entitled to a tax credit up to 50% of employer’s contribution.
  • Private Sector Health Insurance – Competitive Marketplace:   States to set-up health care “Exchanges” where people purchase private health insurance (with subsidies if they are low income); and a Federal health insurance exchange for States that do not establish their own.
  • Children up to Age 26: can remain on their parents’ plans.
  • New Revenues, Medicare and Medicaid Reforms to Pay for the Private Health Insurance Subsidies and Medicaid Expansion:  Limit Flex Spending Accounts to $2500 per year; increase deductibility floor for health expenses to 10%; increase HI Payroll tax for high-income individuals; excise tax on employer-provided high cost “cadillac” health insurance plans; new fees on pharmaceutical manufacturing sector and health insurance sector; excise tax on medical devices (suspended for 2016-17); tax on indoor tanning. Medicare reforms: reduce annual payment increases; reduce special “disproportionate share” payments to hospitals serving low-income patients; allow providers organizing to meet quality thresholds to share in cost savings; reduce payments for excessive hospital readmissions and hospital-acquired infections. Reduce special Medicaid “disproportionate share” payments to hospitals serving low-income patients.
  • Joint Committee on Taxation Revenue Estimates for the Affordable Care Act March 20, 2010
  • CBO Affordable Care Act Cost Estimate March 20 2010
  • Kaiser Family Foundation Fact-sheet-summary-of-the-affordable-care-act
  • CBO: How Repealing Portions of the Affordable Care Act Would Affect Health Insurance Coverage and Premiums
  • CBO Affordable Care Act Page
  • CRS Private Health Insurance Reforms
  • CRS Affordable Care Act Resources
  • Patient Protection and Affordable Care Act