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Yesterday, House Republicans revealed two bills collectively meant to repeal and replace the Affordable Care Act (ACA). House committees will review the legislation beginning today. The bills do not contain any major surprises and propose changes promised by President Trump and House Republicans previously.
Major changes include:
Repeal of ACA-imposed taxes: The ACA-imposed taxes on prescription drugs, over-the-counter medications, health insurance premiums and medical devices would be repealed, albeit not all of them immediately.
Elimination of individual and employer mandate penalties: The individual and employer mandate penalties would be eliminated immediately; however, individuals who do not maintain continuous health care coverage would risk penalties up to a 30 percent premium increase.
Transition of Medicaid to “per capita allotment”: Medicaid would transition to a “per capita allotment” plan.
End of increased federal funding for Medicaid: Increased federal funding for Medicaid to expand coverage for low-income individuals would end in 2020.
Expansion of the use of health savings accounts (HSAs): The use of HSAs would be expanded, allowing more tax-free money to be deposited in HSAs and flexible spending accounts. More medical expenses could be paid with tax-free money.
Replacement of subsidies with tax credits for certain individuals to purchase health insurance: Subsidies created under the ACA would be repealed. Instead, qualified individuals would receive tax credits of $2,000 to $14,000. These tax credits are based on age and family size, and phase out as income increases.
Restoration of Medicaid disproportionate share (DSH) payments: DSH cuts would be restored.
Elimination of federal funds to certain organizations: Certain not for profit organizations would be prohibited from receiving Medicaid reimbursement and federal family planning grants if such organizations engage primarily in family planning services and reproductive health and performs abortions other than for pregnancy as the result of rape or incest or if failure to perform an abortion could place the mother at danger of death.
Age discrimination: Rate protection for older citizens would end.
Affordable Care Act provisions that would remain in effect include:
Protection of those with pre-existing conditions: Insurance companies would be prohibited from denying coverage based on pre-existing conditions.
Maintenance of parental coverage to those under age 26: Dependents would continue to be eligible under a parent’s health plan until age 26.
Although President Trump has called for the sale of insurance across state lines, nothing in the proposed legislation would ease the current restrictions to allow insurance companies to sell policies across state lines.
Republicans have announced plans to repeal the ACA prior to the legislature’s Easter break, which begins April 7, 2017.
Carlton Fields will continue to monitor this piece of legislation, and all other activity surrounding potential repeal and replacement of the ACA. If you have questions regarding how this legislation might affect you or your business, please contact a member of our health care practice group.
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Co-authored by Erica Mallon, corporate counsel at Greenway Health and former Carlton Fields associate.
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