by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
All hands are on deck now for the House GOP to garner enough support for AHCA to avoid going back to the drawing board. President Trump hasofficially intervened by reaming out the Freedom Caucus (specifically North Carolina Representative Mark Meadows) for their hard-line opposition to the bill, and amendments have been made to temper the sticking points on taxing and spending policies related to Medicaid reform and tax credits.
To appease Freedom Caucus members, one of the bill amendments would no longer allow North Carolina and the 18 other non-Medicaid expansion states to receive a generous 90 percent federal “match rate” for low-income adults without children who are added to their medical assistance programs. AHCA’s original language placed enormous political pressure on states to expand their Medicaid programs before 2020. If non-expansion states want to extend medical assistance eligibility for more people, they certainly can. But they will end up shouldering a larger portion of the cost. Other amendments designed to appease principled conservatives include granting states the option to finance their Medicaid programs with a lump sum federal block grant and tying work requirements to program eligibility.
On tax credits, the House GOP has proposed to increase the $4,000 limit for people between ages 50-64. Similar to Obamacare’s subsidies, these credits are distributed to people who don’t receive health insurance through their employer, Medicaid, or Medicare. However, the main difference is that these credits will be placed in the hands of the consumer and no longer in the hands of insurance companies. I don’t believe that Mark Meadows and his Freedom Caucus colleagues will endorse the amendment to enhance credit amounts (or tax credits at all for that matter). It’s been argued that these refundable tax credits are really an individual mandate in disguise, given that one can only purchase health insurance with their credit amount. It also means that the government will still be in the business of determining what types of health plans “qualify” to be purchased with that credit.
The argument goes that tax credits, for the most part, may not even be necessary to offset the cost of health plans if Congress or the Department of Health and Human Services (DHHS) discard many of the cost-driving insurance regulations significantly, thereby reducing premiums. The House leadership has repeatedly stated, however, that doing away with these regulations can’t be achieved in the budget reconciliation bill. Regulation reform is set to be enforced separately under Secretary of DHHS Tom Price.
We can only wait to see how the final House vote on a revised AHCA will turn out this evening. But because the Freedom Caucus and others are now learning that that regulatory repeal can be inserted into the budget reconciliation bill, a final House vote might be postponed for another day.