House Repeal and Replace Bill Contains Important Conservative Reforms

March 15, 2017 - By Grace-Marie Turner, President, Galen Institute

The American Health Care Act is taking fire from all sides, not the least from the circular firing squad conservatives have formed, threatening passage of the only piece of repeal and replace legislation that House leaders say will be presented to members for a vote this year.

The Congressional Budget Office lobbed another bombshell into the debate on Monday with its estimates of cost and coverage, but the CBO’s estimate is a static analysis that is unable to reflect the dynamics of changes in the marketplace and human behavior.

More people will be offered more choices of plans at more affordable prices under the AHCA, but the CBO says if the coverage is not as comprehensive as the Ferrari-level coverage in Obamacare, it doesn’t count. That is not the way millions of Americans see it.

More than 15 months of work has gone into shaping this health reform package in the House, and Speaker Ryan believes this is the best answer to appease the many warring factions in his caucus while still trying to thread the needle of the process through which the bill must pass the Senate.  The AHCA, in fact, could be the most transformative entitlement reform in decades.

  • It would begin to turn Medicaid into a program that would require states to be partners in managing spending to make sure the dollars cover as many services as possible and that those with the greatest need are getting the most help—the complete opposite of the current Medicaid incentives. Under Obamacare, states have a strong incentive to sign up able-bodied single adults for Medicaid, while people who are much needier and with much lower incomes linger on waiting lists.
  • The AHCA also repeals $1 trillion in taxes that were primarily hitting middle-income Americans in the form of higher health costs—taxes on health insurance, medical devices, prescription drugs, etc.
  • The bill zeros out the fines for the individual mandate and employers mandate.
  • It provides increased flexibility for people to open and use Health Savings Accounts to help pay routine bills and save for future healthcare needs.
  • It provides $100 billion over 10 years for the states to begin to innovate in providing extra help for those at the lower-end of the income scale, people with pre-existing conditions, and help to stabilize the individual health insurance markets that are near collapse.
  • And, perhaps most importantly, it provides a safety net for people currently on Obamacare, both those with private plans through exchanges and those on Medicaid through 2020, while the new marketplace for more affordable insurance develops.

 

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