Republicans unveiled their long-awaited legislation to repeal and replace the Affordable Care Act, proposing to phase out key parts of the law over several years as they try to break a stalemate between moderates and conservatives in their party.
Called the American Health Care Act, the House Republicans’ proposal includes a refundable, age-based tax credit to help people buy insurance. It ends Obamacare’s requirement to have coverage, and would eventually eliminate many taxes used to fund the 2010 law. Other changes, like a wind-down of an expansion of Medicaid, are phased in over a period of years.
It’s not clear whether the proposal can win the support of House conservatives or clear the Senate — where Republicans hold a thin majority and are relying on a fast-track legislative procedure full of limitations. President Donald Trump, who has eschewed detailed policy proposals in favor of tweets and broad promises about better health care for less money, touted the plan Tuesday on Twitter: “Our wonderful new Healthcare Bill is now out for review and negotiation. ObamaCare is a complete and total disaster – is imploding fast!”
“Don’t worry, getting rid of state lines, which will promote competition, will be in phase 2 & 3 of healthcare rollout,” Trump added. He also said he was working on “a new system where there will be competition in the Drug Industry. Pricing for the American people will come way down!”
Seven years after Republicans began promising repeal, the proposal is the most comprehensive look yet at how the GOP will approach replacing the health law, which brought coverage to an estimated 20 million people. Republicans have blamed the ACA for rising insurance premiums and high out-of-pocket costs, and criticized its requirement that everyone have health insurance or pay a penalty.
Related: Opposition grows to repeal of ACA
A CNN/ORC poll released Tuesday found that Americans are split over Obamacare’s mandate to obtain coverage or pay a penalty, with 50 percent opposed to removing the requirement, while 48 percent favor removal. Other recent opinion polls have shown rising support for the Affordable Care Act since Trump’s election.
The proposal released Monday night represents an attempt to appease different factions within the Republican Party. Democrats were excluded entirely from the bill’s drafting, and have complained that it was written in secret.
While conservatives have pushed for full, immediate repeal, one concern among some moderate Republicans is that too-sudden changes would callously toss people out of coverage right away — particularly those in Medicaid, the federal-state program for the poor that was expanded under Obamacare.
Estimates of how many people would be covered under the Republican plan in comparison to Obamacare are not yet available.
“I don’t think it’s fair to want to compare what we’re proposing today to what Obamacare might have been,” White House budget director Mick Mulvaney told NBC News Tuesday morning. “You have to compare it to what Obamacare is. And it’s a failure. By that comparison, this new program is going to be a tremendous success.”
Under Obamacare, the proportion of Americans without health insurance fell to a record low in 2015. Just 10.5 percent of Americans younger than 65 lacked coverage, down from 18.2 percent in 2010, before the law’s coverage expansions began.
Members of the House Freedom Caucus and Kentucky Senator Rand Paul quickly voiced their objections to the Republican replacement bill, dismissing it as “Obamacare Lite” and not the fuller overhaul of federal health care law they believe is needed.
“It won’t work. Premiums and prices will continue to spiral out of control,” Paul said Tuesday on Fox News, adding on Twitter that the “House leadership plan” won’t pass.
Paul said he was heartened by Trump’s tweet that the bill was just a starting point for negotiations. “I think he’s open-minded on this” and realizes “conservatives have a lot of objections” to the House GOP bill, he said on Fox.
A staff analysis prepared for the Republican Study Committee, an influential group of House conservatives, called the refundable tax credits “a Republican welfare entitlement.”
But the committee’s chairman, Representative Mark Walker of North Carolina, who had criticized earlier drafts of the bill, said the legislation had moved “in the right direction” and that his group’s steering committee will meet Tuesday evening to consider the changes.
“We are carefully reviewing this legislation looking in three main areas of shared conservative concern: protection of the unborn, elimination of Obamacare’s Medicaid expansion and ensuring the tax credits are fiscally responsible,” Walker said in a statement.
Republican Mark Meadows, also of North Carolina and chairman of the House Freedom Caucus said they too will meet Tuesday to discuss the legislation.
One senior Republican suggested that under his party’s bill, Americans would have to pay a larger share of their own health care costs.
“Americans have choices, and they’ve got to make a choice,” Representative Jason Chaffetz of Utah, the chairman of the Oversight Committee, said on CNN Tuesday. “So rather than getting that new iPhone that they just love and want to go spend hundreds of dollars on that, maybe they should invest in their own health care.”
Senator Shelley Moore Capito, a West Virginia Republican who had threatened not to support the proposal if Medicaid wasn’t addressed, said, “It’s moving in the right direction.”
“It looks like they’ve moved toward a better transition period, more flexibilities for the governors and ability for the Medicaid expansion population to have the assurance that they’re not going to be left out in the cold,” she said.
House Speaker Paul Ryan said in a statement the plan is designed to “drive down costs, encourage competition, and give every American access to quality, affordable health insurance.”
Health industry groups were measured in their responses. America’s Health Insurance Plans, which represents the insurance industry, said in a statement that “by working collaboratively and in a bipartisan manner with policymakers and the administration, together we can improve health care in our nation.”
Hospitals in states that have expanded Medicaid under Obamacare benefited from reductions in the number of patients they had to treat who couldn’t pay their bills, called uncompensated care. They have the most to lose if the expansion is rolled back.
But the Republican bill would restore cuts to a federal program that pays extra money to hospitals that care for large numbers of patients without insurance or on Medicaid. That would benefit hospitals operating in states that chose not to expand Medicaid.
“This is more positive for hospitals,” particularly those with Medicaid exposure, like Community Health Systems Inc. and Tenet Healthcare Corp., Sheryl Skolnick, director of research at Mizuho Financial Group Inc., said in a note Tuesday to clients.
A copy of the bill is available here, and two House committees will begin debating it on Wednesday.
Key provisions include:
An advanceable, refundable tax credit to help buy insurance for individuals, that phases out for people making more than $75,000 ($150,000 for a couple filing jointly). The credit starts at $2,000 per person and grows to $4,000 with age. A family can get as much as $14,000 in total.
Immediately ends a requirement that individuals have insurance coverage and another rule that requires some businesses to offer coverage to their workers.
Expands the allowable size of health-care savings accounts that can be coupled with high-deductible insurance plans, as much as $6,550 for an individual or $13,100 for a family, nearly twice the limit for 2017 under current law.
Winds down Obamacare’s expansion of Medicaid. Changes it to a per-capita system, where states are given a set amount for the number of people in categories including the disabled, elderly, childless adults and pregnant mothers.
Allows people with pre-existing conditions to buy insurance, but requires “continuous” coverage to discourage people from buying it only when they get sick. Individuals who go uninsured for longer than a set period face 30 percent higher premiums as a penalty.
Gives states a $100 billion fund over a decade to help lower-income people afford insurance, and to help stabilize state insurance markets. The fund could be used to help lower patients’ out of pocket costs or to promote access to preventive services.
Delays until 2025, instead of permanently repealing, a tax on high-cost health insurance plans.
No cost estimate
There was no estimate of how much the bill will cost, creating a risk for Republicans as they move forward. The proposal is paid for for by eventually repealing Obamacare’s expansion of Medicaid, cutting insurance subsidies and by keeping, but delaying, a tax on high-cost insurance plans.
“You want to know it’s fiscally responsible,” Senator Bill Cassidy, a Louisiana Republican, said in an interview. “You want to know the taxpayer can’t get hosed, without gimmicks, right? And you’d want to know that folks, that President Trump, who said he wants as many people covered, you’d want to see his pledge fulfilled, at a lower cost.”
Two Senate Republicans — Susan Collins of Maine and Lisa Murkowski of Alaska — oppose eliminating federal funding for Planned Parenthood, a provision of the House bill. And at least four Senate Republicans — enough to sink the bill in their chamber — have said they will oppose legislation that would leave people who gained coverage under Obamacare’s Medicaid expansion without insurance.
“Congressional Republicans are leading a desperate forced march to pass a dangerous bill written in secret which few members of Congress have seen, let alone read,” Senator Ron Wyden, an Oregon Democrat, said in a statement Monday night.
Democrats also argued that people currently covered under Obamacare would be worse off.
“The Republican repeal bill would charge them more money for less care,” representatives Frank Pallone of New Jersey and Richard Neal of Massachusetts said in a statement. They are the top two Democrats on the House Energy and Commerce Committee and Ways and Means Committee, respectively.