House Republicans unveil plan for health care overhaul

Last Updated Mar 6, 2017 8:21 PM EST

WASHINGTON -- House Republicans have released their long-awaited bill dismantling much of former President Barack Obama’s health care overhaul. The measure would roll back the government’s health care role and is expected to result in fewer people having insurance coverage.
       
House committees planned votes on the legislation Wednesday. That will launch perhaps the year’s defining battle in Congress, and GOP success is by no means assured because of internal divisions.

The plan would repeal the law’s fines on people who don’t purchase health insurance. Instead of the statute’s income-based premium subsidies, people would get tax credits based on age. The subsidies would phase out for higher-earning people.

GOP success is by no means a slam dunk. In perhaps their riskiest political gamble, the plan is expected to cover fewer than the 20 million people insured under Obama’s overhaul, including many residents of states carried by President Donald Trump in November’s election.

Republicans said they don’t have official estimates on those figures yet. But aides from both parties and nonpartisan analysts have said they expect coverage numbers to be lower.

The plan would repeal the statute’s unpopular fines on people who don’t carry health insurance. It would replace income-based premium subsidies in the law with age-based ones that may not provide as much assistance to people with low incomes. The payments would phase out for higher-earning people.       

Some of the popular provisions in the existing health care law, such as requiring plans to cover individuals with pre-existing conditions and allowing children to remain on their parents’ health insurance until age 26, will be preserved. 

Obama’s expansion of Medicaid to more lower-income people would continue until 2020. The bill would eventually change how the federal government helps finance that program.

More significantly, Republicans would overhaul the federal-state Medicaid program, changing its open-ended federal financing to a limit based on enrollment and costs in each state.

A series of tax increases on higher-earning people, the insurance industry and others used to finance the Obama overhaul’s coverage expansion would be repealed as of 2018.

In a last-minute change to satisfy conservative lawmakers, business and unions, Republicans dropped a plan pushed by House Speaker Paul Ryan, R-Wis., to impose a first-ever tax on the most generous employer-provided health plans.

Markups on the bill are expected to begin this week in the House Energy and Commerce Committee and the House Ways and Means Committee. 

Here’s a look at some of the provisions:

PRIVATE HEALTH INSURANCE

  • Provides tax credits for people purchasing their own health insurance. The subsidies would be keyed primarily to age, rising as people get older. Financial assistance would be phased out for individuals making more than $75,000 and married couples earning more than $150,000. Subsidies could be used to buy any plan approved by a state. 
  • Eliminates cost-sharing subsidies in Obama’s Affordable Care Act that helped people with modest incomes meet the costs of insurance deductibles and copayments. States, however, would have the option of providing similar assistance with federal financing. 
  • Greatly expands contributions to health savings accounts, which allow people with high-deductible insurance to cover expenses that their plans don’t pay for. 
  • Protects people with pre-existing health problems from being denied coverage. However, consumers must maintain continuous coverage - otherwise, they would face a flat 30 percent surcharge on top of their premiums. States could use federal money to create high-risk pools as insurers of last resort. 
  • Preserves ACA provision that let young adults stay on parental coverage until they turn 26. 
  •  Allows insurers to charge their oldest customers up to 5 times what they charge young adults. The ACA limits that to 3 times. 
  • Prohibits use of tax credits to purchase any plan that covers elective abortions. Currently if a health plan covers abortions it must collect a separate premium to pay for such procedures.

MEDICAID

  • Maintains the ACA’s higher federal financing for expanded Medicaid through the end of 2019. After that, states can only continue to receive enhanced federal payments for beneficiaries already covered by the expansion, which has mainly helped low-income adults with no children living at home. But for newly enrolled beneficiaries, the federal government would provide a lower level of financing. 
  • Overhauls the broader Medicaid program to end its open-ended federal financing. Instead, each state would receive a limited amount based on its enrollment and costs. That federal payment would be increased according to a government measure of medical inflation. 
  • Imposes a one-year funding freeze on Planned Parenthood, a major provider of women’s health services, including abortion.

PENALTIES & TAXES 

  • Repeals the ACA’s tax penalties on people who remain uninsured and on larger employers who do not offer coverage. The repeal is retroactive to 2016. 
  • Repeals the ACA’s taxes on upper-income earners, investors, health insurance plans and medical device manufacturers. Repeals 10 percent sales tax on indoor tanning.

COVERAGE

  • Expected to cover fewer people than the Obama-era law, but final estimates are not yet available from the Congressional Budget Office.