House Republicans released a long-awaited Obamacare replacement Monday that would dismantle the law’s extensive system for expanding health insurance coverage to millions of Americans.
In all, the plan would probably take away health coverage from several million Americans and raise costs for many more, especially low-income people and the middle-aged. But it would immediately end the requirement that all Americans have insurance, which has been highly unpopular, especially with Republicans, reduce federal authority over the healthcare system and provide a huge tax cut to upper-income families.
The legislation, the first such bill that House Republican leaders have produced, would eliminate hundreds of billions of dollars of federal aid that has allowed states to expand their Medicaid programs to millions of previously uninsured poor people.
And the bill — called the American Health Care Act — would restructure a system of tax subsidies that have helped millions of working Americans who don’t get coverage through an employer to buy health plans.
The plan’s impact on the federal deficit is unclear because House Republicans did not release a cost estimate for the proposal.
The proposed change in Medicaid, known as Medi-Cal in California, and the reduction in subsidies would both have major effects on the state, threatening to put the budget into the red in future years and reducing the number of state residents able to buy coverage.
The bill, the first step in what could be a long and arduous legislative effort to fulfill a key Republican campaign promise, includes several provisions that appeal to conservatives.
In addition to doing away with taxes created by the Affordable Care Act and the mandate that Americans have health insurance or pay a penalty, it would ban federal funding for Planned Parenthood and any other medical institutions that provide abortion services, another longtime GOP promise.
Though it would continue to provide aid to help people buy health plans, it would prohibit Americans from using those subsidies to buy health insurance that covers abortions.
Despite those provisions, the bill faces opposition from many conservatives who say it does not go far enough in uprooting the current law.
The critiques from both left and right underscore the difficulty the GOP leadership faces in pushing the bill, despite the Republican majorities in both the House and Senate.
House Republicans did not release any analysis of the bill’s effect on insurance coverage, a crucial omission.
Such analysis, which is expected to show that millions of people would lose coverage, could be a political bombshell for the GOP. The current law is credited with extending coverage to more than 20 million previously uninsured Americans and driving the nation’s uninsured rate to the lowest levels ever recorded.
Senior House Republicans billed the legislation, which two House committees will start debating Wednesday, as the fulfillment of their seven-year pledge to repeal and replace the Affordable Care Act.
“It is Obamacare gone, because we repeal all those taxes, those mandates, those subsidies. There’s nothing left there,” House Ways and Means Committee Chairman Kevin Brady (R-Texas), one of the legislation’s lead authors, told Fox News on Monday. “We’re giving Americans … freedom like they’ve never had before to buy healthcare that’s right for them.”
White House Press Secretary Sean Spicer hailed the release of the bill, saying, “Today marks an important step toward restoring healthcare choices and affordability back to the American people.”
But a tweet from Sen. Rand Paul (R-Ky.) provided evidence of the opposition from the party’s right wing.
“This sure looks like Obamacare Lite!” wrote Paul, who is leading the conservative opposition with Sens. Ted Cruz (R-Texas) and Mike Lee (R-Utah) and the House Freedom Caucus.
Congressional Democrats and other defenders of the current healthcare law charged that the GOP bill would strip away vital health protections.
“Trumpcare doesn’t replace the Affordable Care Act; it forces millions of Americans to pay more for less care,” Senate Minority Leader Charles E. Schumer said. “This plan would cut and cap Medicaid, defund Planned Parenthood and force Americans, particularly older Americans, to pay more out of pocket for their medical care.”
With a few notable exceptions, the legislation released Monday reflects healthcare plans that House Republicans have been working on for years but have never put into legislative language.
Starting in 2020, the bills would phase out hundreds of billions of dollars in federal aid that has allowed 31 states to expand their Medicaid programs, a key pillar of Obamacare.
After 2020, states could continue to provide expanded coverage, but they would have to pick up substantially more of the cost, a disincentive that would likely force many states to scrap the expanded safety net.
Equally important, the House bill would dramatically change federal support for Medicaid, effectively capping future aid to states.
The House GOP plan would also restructure insurance marketplaces created through Obamacare for Americans who don’t get health benefits at work.
Though the legislation prohibits insurers from turning away sick people, insurers would no longer be required to offer health plans that meet the same coverage standards, another protection in Obamacare. That could allow the sale of more catastrophic health insurance plans that impose higher deductibles on consumers.
People who go without insurance for more than a couple of months would face a 30% surcharge on their premiums — a provision designed to replace the current law’s mandate that people buy coverage.
The legislation would create a more limited system of subsides — refundable tax credits, as in the current law — to help people buy coverage.
Subsidies currently are linked to consumers’ income and to the price of health plans. That effectively offers the most protection to low-income people who live in regions of the country with expensive health insurance.
The House GOP alternative would instead link subsidies primarily to consumers’ age, with annual assistance ranging from $2,000 for people under 30 to $4,000 for those over 60. They would have a cap of $14,000 per family.
But independent analysis suggests that many older and poorer Americans would probably end up paying more.
In a nod to criticism from some Republicans, senior House leaders agreed to phase out the federal assistance for higher-income households — single Americans making $75,000 a year or more and couples making $150,000 a year or more.
Bowing to criticism from leading business groups, House GOP leaders also dropped plans to begin taxing health benefits that are provided by employers, a proposal that was widely seen as political suicide.
The House legislation still eliminates major taxes in the current law, however, including levies on insurance companies and medical device makers and a tax on families making more than $250,000 a year. Elimination of the latter will amount to a huge tax cut for the country’s wealthiest taxpayers.
Without any alternative to these taxes to pay for their bill, House Republicans had to engage in some budget games, including keeping another unpopular Obamacare tax on generous health plans but delaying it for a few years.
The legislation is under fire from conservative Republicans, who charge that the party is creating a different government entitlement by replacing Obamacare’s subsidies with a system of its own.
Conservatives are being backed by the influential Koch network group, led by Americans for Prosperity, which promised a high-dollar ad campaign to push wayward Republican lawmakers to pass nothing short of a full repeal. The group is staging a rally Tuesday outside the Capitol to pressure GOP lawmakers.
Even if the legislation clears the House, it faces a tougher political landscape in the Senate, where Republicans hold a narrow majority.
On Monday, four Republican senators raised concerns that cutting Medicaid could hurt their most vulnerable constituents.
“We believe Medicaid needs to be reformed, but reform should not come at the cost of disruption in access to healthcare for our country’s most vulnerable and sickest individuals,” Sens. Rob Portman of Ohio, Lisa Murkowski of Alaska, Cory Gardner of Colorado and Shelley Moore Capito of West Virginia said in a letter to Senate Majority Leader Mitch McConnell.