Leaked Copy of the ACA Replacement Plan
Wednesday, March 1, 2017
Posted by: Kate Bauer
Leaked Copy of the ACA Replacement Plan
What is being planned to replace the Affordable Care Act and how it might impact birth centers
A draft of the Republican plan to replace the ACA was leaked last week. (1) It gives some important insight into what a replacement plan might look like. (2) The final document is likely to be much different, because the Congressional Budget Office must still score this bill and give favorable ratings before it can be moved forward. When legislators hear from their constituents and State Governors as to whether these proposals would work, more changes could be made in the replacement plan. If a majority cannot come to agreement about a replacement plan, there is a chance the ACA could be repealed without a replacement plan in place.
We hope that the repeal of the ACA will not include the Birth Center Bill, Section 2301. So far, repeal plans seem to focus on parts of the ACA that affect the budget. However, birth centers and their advocates still need to reach out to legislators to educate them about not repealing the ACA as a whole, because of the overall impact on access to services such as Freestanding Birth Centers and Maternity Care and Medicaid coverage of women and families.
The proposed replacement has several key provisions:
- Eliminate the individual mandate requiring everyone to have health insurance.
- Replace the subsidies that help some pay for insurance premiums with tax credits for people who buy health insurance.
- Replace Medicaid expansion with federal block grants to states.
Other points that would impact healthcare and potentially birth center operations:
- It would repeal Obamacare's requirement for coverage of Essential Benefits. The legislation would repeal the ACA’s essential health benefits requirements, which mandated that health plans cover 10 categories of health care services. It would instead leave decisions about what coverage to require to the states, starting in 2020. Requiring health insurance to cover maternity care is one of the essential health benefits in the ACA that would be repealed under this plan.
- It would dramatically change Medicaid. The bill would phase out by 2020 the Medicaid expansion that has covered millions of people under Obamacare. Instead, states would begin to receive a set dollar amount for each person covered by the program with variations based on health status (more money would be allocated for the disabled). This represents a change from the current open-ended entitlement the program.
- It would repeal the Prevention and Public Health Fund. The bill would repeal this funding stream, intended to support various prevention and public health activities, in 2019. Congress initially provided $15 billion over the fund’s first 10 years, and it was eventually supposed to increase to $2 billion per year in perpetuity. The fund has been at perennial risk since its passage in 2010, but it is an important source of public health funding. It has become an essential part of the Centers for Disease Control and Prevention’s budget — accounting for approximately 12 percent of the agency’s funding. There would be no obvious replacement for those dollars without further congressional action.
- It would repeal the tax on pharmaceutical manufacturers. This tax repeal would decrease funding for healthcare by doing away with the manufacturer tax on pharmaceutical companies. The proposed replacement bill would do away with the tax starting in 2017. The drug industry had $4 billion left to pay in 2017, $4.1 billion in 2018, and $2.8 billion per year after that. The taxes on medical devices, health insurance plans, and even tanning beds would also be repealed. Those revenue streams help to cover the cost of the ACA. Republicans are instead proposing adding a tax on employer-based health insurance, which is currently not taxed, to pay for their plan. Major employer groups are already aligning against it.
- It keeps preexisting condition coverage but loosens restrictions on health plans' ability to charge older people more. One thing the bill doesn’t do is repeal the ACA provision that prohibits health plans from discriminating against people with preexisting conditions. That may be because it would be hard to justify under the procedural rules that Republicans need to use to pass the bill — plus that policy is among the law’s most popular elements and even President Trump has said it should be maintained. But another key insurance reform meant to protect sicker people takes a hit: The proposed bill would allow insurers to charge older people five times more than younger people; the ACA had limited the difference to three times as much. The AARP is already mobilizing against such a change. The bill appears to try to offset extra cost by basing its tax credits for purchasing insurance on age: Older people would receive a bigger tax credit.
Contact Jill Alliman, AABC Government Affairs Committee Chair, with any questions or comments.
1) Politico News. (2017). Replacement plan draft Retrieved from http://www.politico.com/f/?id=0000015a-70de-d2c6-a7db-78ff707e0000
2) Scott, D. (2017). Five takeaways from the leaked Republican bill to repeal Obamacare. PBS News Hour Blog. Retrieved from: http://www.pbs.org/newshour/rundown/5-takeaways-leaked-republican-bill-repeal-obamacare/