House Passes ACA Repeal-and-Replace Bill

May 04, 2017

Spurred on by President Donald Trump and a last-minute amendment, the Republican-controlled House of Representatives today finally passed legislation to repeal and replace the Affordable Care Act (ACA).

The vote fell predictably along party lines, 217 to 213.

The bill, called the American Health Care Act (AHCA), appeared dead in the water in March when House Speaker Paul Ryan (R-WI) cancelled a vote because he couldn't muster enough Republican support, particularly from staunchly conservative members who constitute the so-called Freedom Caucus. They were eventually won over by changes to the bill that give states more control over health plan design.

The AHCA dismantles most of the framework of the controversial healthcare reform law passed by a Democratic Congress and signed by President Barack Obama in 2010. Congressional Republicans view the ACA as an example of big-spending big government with too many mandates and regulations.

Unlike dozens of previous repeal measures passed in the House during the Obama administration, today's vote on the AHCA is more than symbolic — the bill doesn't face the threat of a presidential veto. Trump leaned on House Republicans to pass it. However, the AHCA does face unfriendly prospects in the Senate, where Republicans command a slim majority. Senate Democrats, like their colleagues in the House, have roundly condemned the AHCA as erasing major gains in insurance coverage under the ACA, a position also taken by organized medicine.

Some 20 million more Americans have gained coverage either through expanded Medicaid eligibility in 31 states or through insurance marketplaces, or exchanges, where they can buy individual or family policies, more often than not with premium subsidies. In contrast, the Congressional Budget Office (CBO) has estimated that the number of uninsured would climb to 24 million by 2026 under the previous version of the AHCA than if the ACA remained in force.

The AHCA preserves some popular ACA provisions. Insurers operating in the ACA exchanges still cannot deny coverage to individuals on the basis of preexisting conditions. Children can still remain on their parent's health plan until they turn 26 years of age.

However, the AHCA guts the ACA's individual mandate to obtain coverage by eliminating the tax penalty for noncompliance. It also replaces the ACA's income-based premium subsidies with subsidies based on age. According to the Kaiser Family Foundation, the AHCA subsidies generally translate into less assistance for the poor.

The amendment that convinced the Freedom Caucus to support the AHCA would give states the option to define the benefits guaranteed in health plans sold on the exchanges, as opposed to what the ACA requires. In other words, states could allow insurers to offer policies that don't cover hospitalization, prescription drugs, or maternity care in the name of making coverage less expensive. In addition, states could waive the ACA's community rating provision, which prohibits insurers from charging higher premiums on account of a person's preexisting conditions. However, to qualify for this waiver, a state has to operate some sort of program, such as a high-risk insurance pool, to help the most seriously ill obtain affordable coverage. The AHCA kicks in $130 billion toward that end in the form of a Patient and State Stability Fund.

Weakened protection for individuals with preexisting conditions did not set well with moderate Republicans, which resulted in a second amendment that pumps $8 billion over 5 years into high-risk insurance pools. Critics of the AHCA say that these state-level programs traditionally have been underfunded and that they'll continue to be under the Republican bill, despite the extra $8 billion.

Apart from revamping the insurance exchanges, the AHCA cuts off federal funding for Medicaid expansion. Regular federal contributions to state Medicaid programs, which are now open-ended, would get squeezed as well. The bill caps those contributions on a per-capita basis. All in all, federal spending on Medicaid would decrease by $880 billion from 2017 through 2026, according to the CBO's analysis, or score, of the original bill.

Lawmakers voted today on the amended version of the AHCA without the benefit of an updated CBO score, which House Democrats called a rush to judgment.

Three Shades of Disappointment for Medical Societies

Most of organized medicine and the healthcare industry in general have given the AHCA bad reviews all along, saying it would take away healthcare coverage from those who need it the most. The bill's passage today unleashed some unusually strong protests in news releases from this sector, whose advice was seemingly ignored by lawmakers.

"Deeply disappointed" was the complaint of choice for the American Academy of Family Physicians and the American Hospital Association; "extremely disappointing" for the American College of Physicians and the American Heart Association. The American Thoracic Society was "gravely concerned." The American College of Cardiology was "disappointed" sans adverb.

The American Congress of Obstetricians and Gynecologists said it "denounces" the House passage of the AHCA. It called the option for states to drop maternity care as an essential health plan benefit and the end of Medicaid expansion "an assault on women's health."

The AHCA is "bad policy for children and dangerous policy for our country," said the American Academy of Pediatrics. "The rate of children's health coverage in our country is at a historic high of 95%; the AHCA would not only halt this progress, it would tear it down."

Milder reproof came from the America's Health Insurance Plans, which said that the bill "needs important improvements to protect low and moderate income families." Likewise, the American Medical Association (AMA) toned down its criticism, stating that the AHCA will "result in millions of Americans losing access to quality, affordable health insurance and those with pre-existing health conditions face the possibility of going back to the time when insurers could charge them premiums that made access to coverage out of the question."

The AMA and other groups urged the Senate and the Trump administration to work with them to fashion bipartisan policies that wouldn't leave anybody shortchanged.

According to published reports, Senate Republicans do not intend to vote on the AHCA per se, but instead blend portions of it into their own legislation. Several Senate Republicans have already introduced ACA repeal-and-replace bills. The goal will be to craft a measure that can win at least 50 Republican votes, which would become a simple 51-vote majority with a tie-breaker cast by Vice President Mike Pence.

Republicans now occupy 52 Senate seats, eight short of the 60 needed to overcome a Democrat filibuster. However, Senate Republicans plan to repeal and replace the ACA in their chamber through a so-called budget reconciliation bill, which cannot be filibustered. Budget reconciliation bills are confined to spending and tax matters, so Senate Republicans must be careful not to include any changes to the ACA that lie outside that protected subject matter. At the same time, they must make their bill palatable to moderate Republicans who have objected to the AHCA or else risk falling short of 50 votes.

Follow Robert Lowes on Twitter @LowesRobert

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