by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
March 23, 2017 marked the seventh birthday of the Affordable Care Act (ACA). It might not make it to eight. That all depends, of course, on whether the House GOP can get enough party line votes to push their ACA “repeal” bill over to the Senate.
Interestingly enough, Republicans are facing a similar situation as Democrats did back in 2009 and 2010 when it comes to making their respective visions of national health reform a reality. Just as Democrats relied on the budget reconciliation process for the ACA to be signed into law by former President Barack Obama, Republicans have to use this special legislative process too. By the graces of budget reconciliation, Democrats were able to get away with passing sweeping legislation in 2010 without a single Republican vote and avoid a Republican filibuster. The GOP can get away with the same procedural process, but that’s proving to be a difficult roadblock to circumvent due to intraparty factions.
The Washington Post reports that the House GOP health reform bill, the American Health Care Act (AHCA), can’t lose more than 21 House votes and two Senate votes, assuming that no Democrat will want to support a restructured version of health reform that doesn’t ensure that the government will provide universal coverage. As of this week, however, 24 House Republicans and six Republicans in the Senate have voiced hard opposition to AHCA. Just as some Democrats in 2010 didn’t think the ACA went far enough towards a single-payer system or were unhappy with the fact that a public option didn’t make the cut, some House Republicans don’t think the AHCA stands firm on promises to repeal Obamacare or conservative principles generally.
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 has officially 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.