CHA News Article

CHA Summarizes New ACA Repeal/Replace/Reform Bills

Bills introduced yesterday by the two primary committees of jurisdiction outlined the plans of the Republican leadership to partially repeal and replace the Affordable Care Act (ACA). The nonpartisan Congressional Budget Office has yet to publish its score, so it is not certain if the bills would meet the prescribed budget savings targets or how many people would lose or gain health insurance coverage as compared to current law. The House committees will begin considering legislation on Wednesday, with the goal of passing it within a few weeks.

CHA issued the attached media statement today and will send a letter to the California congressional delegation outlining its concerns, as well as committing to work with Congress to ensure optimal health care coverage and support for hospitals.

Key components of the bills include:

  • Removes the individual mandate and penalty
  • Creates age-based refundable tax credits ranging from $2,000 to $4,000, replacing the ACA’s income-based subsidies. Credits for a single household would be limited to $14,000. Credits would be phased out for individuals earning at least $75,000 and  families earning at least $150,000.
  • Repeals essential benefit plan requirements beginning Dec. 31, 2019
  • Reinstates Medicaid DSH cuts for expansion states in 2018; for non-expansion states, Medicaid DSH cuts are repealed in 2020.
  • Eliminates the Medicaid expansion, adopted in 31 states including California, at the end of 2019 when expansion beneficiaries could remain enrolled, but would become ineligible if they drop out of the program for 30 days.  
  • Caps Medicaid payments to states based on the number of Medicaid enrollees (a per capita cap) beginning in 2020. The base year for these expenditures is 2016, and the growth rate will be based on the medical care component of the consumer price index, which is significantly lower than the current projected growth rate.
  • Requires that individuals maintain continuous coverage or face a financial penalty the next time they seek to obtain insurance
  • Defunds Planned Parenthood for one year
  • Eliminates many of the ACA taxes, including but not limited to the medical device tax, the drug industry excise tax and tanning salon tax, beginning in 2018. It also delays the implementation of the “Cadillac” tax (on employer sponsored insurance health benefits) until 2025. 
  • Includes $100 billion for state innovation grants aimed at stabilizing the individual market over 10 years. States could use this money to create reinsurance programs or high-risk pools to cover the costs of the sickest, most expensive customers.
  • Allows insurers to charge older customers more, while dropping costs for younger customers. Currently, insurers can charge their oldest customers no more than three times as much as younger enrollees. The bill allows that to increase to a five-to-one ratio.

Of most significance to California’s hospitals, the bills:

  • Reduce the number of insured
  • Do not eliminate Medicare market basket cuts or productivity adjustments for hospitals in the ACA
  • Do not restore Medicare DSH cuts
  • Do not repeal the area wage index rural floor provisions
  • Significantly reduce federal spending for Medicaid but phase out the Medicaid expansion and reduce the annual growth rate