5 key pieces of a 'TrumpCare' plan that could affect your health
The House on Friday voted to join the Senate in approving a budget resolution that puts GOP lawmakers and President-elect Donald Trump on a politically fraught legislative path to eventually repealing and replacing the Affordable Care Act, President Obama's signature 2010 health insurance program that currently insures more than 20 million Americans.
The 227 to 198 vote in the Republican-controlled House to begin the perilous process was motivated more by GOP lawmakers' disdain for Obamacare and its soaring premiums and out of pocket costs than out of conviction their party has a far superior replacement plan waiting in the wings. Four committees in the House and Senate now must report back to the Senate and House Budget Committees by Jan. 27 with specific language for eviscerating key provisions of the law, including taxes, premium subsidies and mandates.
Then the GOP leadership must sell the final package to their members in the House and the Senate before holding final votes in the two chambers. But that, in the greater scheme of things, will be the easy part, since special budget reconciliation rules being utilized by the GOP will require a simple majority vote in the two chambers to pass the resolution.
The heavy lifting will come when the leaders must craft and sell a legitimate and workable replacement program to Republican rank and file as well as some moderate Democrats, whose support will be critical in pushing through a replacement plan without the reconciliation protections. Without reconciliation, it will take at least 60 votes in the Senate to adopt new health care legislation. Right now, the Republicans hold a narrow 52 to 48 majority, which is not nearly enough to work their will.
While there are numerous differences between the three approaches, all share at least five things in common that are likely to be retained when GOP leaders and health care experts turn their attention to the drawing board and produce a first draft of TrumpCare. Here are brief summaries:
State operated "high-risk pools." Before the advent of Obamacare, older and sicker Americans who had trouble buying private insurance because of the prohibitive premium costs turned to states for assistance in purchasing more reasonably priced coverage in subsidized insurance pools. If Republicans repeal Obamacare, these older and sicker people likely will need help high-risk the states in finding relatively affordable coverage. Ryan and others are discussing providing states with at least $25 billion to help ease their financial burden. Some critics say the old system didn't work very well, and that many of the insurance plans were inadequate.
Refundable tax credits for those without employer, Medicare or Medicaid coverage. Many conservatives have complained over the years that it is unfair that employer-paid premiums for health insurance are exempted from federal income taxes, while employees without coverage in the workplace must buy insurance themselves without the benefit of a tax write-off.
Ryan and Price are advocating a "refundable" tax credit that people of all income groups can use to buy coverage in the private markets. Premium payments could be directly written off individual's income tax obligations. Low-income people who pay little or no federal income tax would qualify for a tax refund to help cover their premium costs. However, some analysts say that Price's approach is far less generous than previous GOP proposals.
For one thing, there is no income test under Price's approach as there is under Obamacare. Instead, the credit is adjusted for age, with older Americans getting the lion's share of the benefit. The credit would provide $1,200 for someone 18 to 35 to purchase an annual policy, $2,100 for those 35 to 50, and $3,000 for those who are 50 and over. At a time of steadily mounting premiums and out-of-pocket costs, the Price approach would likely cover just a fraction of Americans' annual health insurance costs.
Health Savings Accounts. These tax-exempt accounts are a fixture in many workplaces, and the Republicans would provide incentives to employers and employees to expand their use. The idea is to encourage workers to sock away money for unexpected or uncovered medical expenses throughout the year. Employers and individuals would jointly make contributions to the accounts. There were $34.7 billion in roughly 18.2 million HSA accounts last year, according to Forbes. And if the Republicans have their way, there will be plenty more.
Selling health insurance across state lines. This idea is one of Trump's favorites, and he mentioned it frequently throughout the campaign. In effect, insurance companies could market their individual plans to consumers in any state as long as they are licensed in their home states and adhere to their home-state regulations.
However, The Wall Street Journal has reported that Trump's interstate insurance marketing plan is meeting resistance from state insurance regulators, the health insurance industry and independent health care analysts who say the approach has been tried before on a limited basis and has many shortcomings.
Converting Medicaid to a block grant program. The future of federally-funded Medicaid programs for the poor could be very much up in the air, like Trump, Ryan and Price all are pressing for major reforms and savings. The proposal would allow states to choose whether to continue to accept federal Medicaid funding as a per capita cap or to take it as a block grant – and then exercise control over how the money is spent.
Although the fiscal impact of the change is far from clear, some analysts say that the federal funding would be far below current levels. And Republican governors and state legislatures would be likely to tighten regulations for qualifying for coverage.Top Reads from The Fiscal Times