Affordable Care Act Replacements Introduced in Congress
This week, two pieces of legislation were introduced as replacements for the Affordable Care Act (ACA). U.S. Senators Susan Collins (R-ME), Bill Cassidy, MD (R-LA), Shelley Moore Capito (R-WV) and Johnny Isakson (R-GA) introduced the Patient Freedom Act of 2017. While Senator Rand Paul (R-KY) introduced S. 222, the Obamacare Replacement Act.
The Patient Freedom Act of 2017 would give power to state capitols in order to increase access to affordable health insurance and improve patient choice, while preserving important consumer protections. This proposal eliminates “costly and burdensome mandates, making enrollment easy, requiring price transparency, and restoring state authority to set rules for their health insurance markets and giving patients power to make their own health care decisions.” The individual, employer mandates would be repealed while some consumer protections would remain. Those include annual and lifetime limits, prohibition of pre-existing condition exclusions, and prohibitions on discrimination. It also preserves guaranteed issue and guaranteed renewability and allows young adults to stay on their parents’ plan until age 26, as well as preserving coverage for mental health and substance use disorders.
The bill would give states three options:
- Reimplementation of the ACA: Option 1 allows the State to reinstate Title I of the ACA, including its mandates and other requirements. The State can continue to receive federal premium tax credits, cost-sharing subsidies, and Medicaid dollars, to the extent that such subsidies do not exceed the contributions that would have been made under Option 2.
- Choose a New State Alternative: Option 2 allows the State to enact a new market-based system that ensures those with pre-existing conditions are protected. The State could continue to receive funding equal to 95% of federal premium tax credits and cost-sharing subsidies, as well as the federal match for Medicaid expansion. States can choose to receive funds in the form of per beneficiary grants or advanceable, refundable tax credits, but in both cases, funds will be deposited in a Roth Health Savings Account (HSA), meaning the money will go directly to the patient.
- Design an Alternative Solution without Federal Assistance: Option 3 would return power to the States to design and regulate insurance markets that work for their specific populations, without any federal assistance.
The Obamacare Replacement Act would expand access to higher-quality, lower-cost health care for more Americans, regardless of medical history. The bill “empowers the American people to: 1.) Choose inexpensive insurance free of government dictates; 2.) Save unlimited amounts in a health savings account (HSA) and have wider options for using those funds; 3.) Buy insurance across state lines; and 4.) join together in voluntary associations to gain the leverage of being part of a large insurance pool.”
The bill would specifically eliminate the ACA’s essential health benefits requirement, along with other restrictive coverage and plan requirements, to help make low-cost insurance options available to American consumers. The bill will also aim to protect individuals with pre-existing conditions, give tax credits up to $5,000 to contribute to Health Savings Accounts and amends the Internal Revenue Code to allow a physician a tax deduction equal to the amount such physician would otherwise charge for charity medical care or uncompensated care due to bad debt, limited to 10% of a physician’s gross income for the taxable year.