From The New York Times
By ROBERT PEAR and THOMAS KAPLAN
WASHINGTON — House Republicans unveiled on Monday their long-awaited plan to repeal and replace the Affordable Care Act, scrapping the mandate for most Americans to have health insurance in favor of a new system of tax credits to induce people to buy insurance on the open market.
The bill sets the stage for a bitter debate over the possible dismantling of the most significant health care law in a half-century. In its place would be a health law that would be far more oriented to the free market and would make far-reaching changes to a vast part of the American economy.
The House Republican bill would roll back the expansion of Medicaid that has provided coverage to more than 10 million people in 31 states, reducing federal payments for many new beneficiaries. It also would effectively scrap the unpopular requirement that people have insurance and eliminate tax penalties for those who go without. The requirement for larger employers to offer coverage to their full-time employees would also be eliminated.
People who let their insurance coverage lapse, however, would face a significant penalty. Insurers could increase their premiums by 30 percent, and in that sense, Republicans would replace a penalty for not having insurance with a new penalty for allowing insurance to lapse.
House Republican leaders said they would keep three popular provisions in the Affordable Care Act: the prohibition on denying coverage to people with pre-existing conditions, the ban on lifetime coverage caps and the rule allowing young people to remain on their parents’ health plans until age 26.
Republicans hope to undo other major parts of President Barack Obama’s signature domestic achievement, including income-based tax credits that help millions of Americans buy insurance, taxes on people with high incomes and the penalty for people who do not have health coverage.
Medicaid recipients’ open-ended entitlement to health care would be replaced by a per-person allotment to the states. And people with pre-existing medical conditions would face new uncertainties in a more deregulated insurance market.
The bill would also cut off federal funds to Planned Parenthood clinics through Medicaid and other government programs for one year.
“Obamacare is a sinking ship, and the legislation introduced today will rescue people from the mistakes of the past,” said Representative Kevin McCarthy of California, the majority leader.
Democrats denounced the effort as a cruel attempt to strip Americans of their health care.
“Republicans will force tens of millions of families to pay more for worse coverage — and push millions of Americans off of health coverage entirely,” said Representative Nancy Pelosi of California, the Democratic leader.
Two House committees — Ways and Means and Energy and Commerce — plan to take up the legislation on Wednesday. House Republicans hope the committees will approve the measure this week, clearing the way for the full House to act on it before a spring break scheduled to begin on April 7. The outlook in the Senate is less clear. Democrats want to preserve the Affordable Care Act, and a handful of Republican senators expressed serious concerns about the House plan as it was being developed.
Under the House Republican plan, the income-based tax credits provided under the Affordable Care Act would be replaced with credits that would rise with age as older people generally require more health care. In a late change, the plan reduces the tax credits for individuals with annual incomes over $75,000 and married couples with incomes over $150,000.
Republicans did not offer any estimate of how much their plan would cost, or how many people would gain or lose insurance. The two House committees plan to vote on the legislation without having estimates of its cost from the Congressional Budget Office, the official scorekeeper on Capitol Hill.
But they did get the support from President Trump that they badly need to win House passage.
“Obamacare has proven to be a disaster with fewer options, inferior care and skyrocketing costs that are crushing small business and families across America,” said the White House press secretary, Sean Spicer. “Today marks an important step toward restoring health care choices and affordability back to the American people.”
The release of the legislation is a step toward fulfilling a campaign pledge — repeal and replace — that has animated Republicans since the Affordable Care Act passed in 2010. But it is far from certain Republican lawmakers will be able to get on the same page and repeal the health measure.
On Monday, four Republican senators — Rob Portman of Ohio, Shelley Moore Capito of West Virginia, Cory Gardner of Colorado and Lisa Murkowski of Alaska — signed a letter saying a House draft that they had reviewed did not adequately protect people in states like theirs that have expanded Medicaid under the Affordable Care Act.
Three conservative Republicans in the Senate — Mike Lee of Utah, Rand Paul of Kentucky and Ted Cruz of Texas — had already expressed reservations about the House’s approach.
In the House, Republican leaders will have to contend with conservative members who have already been vocal about their misgivings about the legislation being drawn up. “Obamacare 2.0,” Representative Justin Amash, Republican of Michigan, posted on Twitter on Monday.
Representative Mark Meadows, Republican of North Carolina and the chairman of the conservative House Freedom Caucus, also offered a warning on Monday, joining with Mr. Paul to urge that Republican leaders pursue a “clean repeal” of the health care law.
“Conservatives don’t want new taxes, new entitlements and an ‘ObamaCare Lite’ bill,” they wrote on the website of Fox News. “If leadership insists on replacing ObamaCare with ObamaCare-lite, no repeal will pass.”
The move to strip Planned Parenthood of funding and the plan’s provisions to reverse tax increases on the high-income taxpayers will also expose Republicans in more moderate districts to Democratic attacks.
The bill would provide each state with a fixed allotment of federal money for each person on Medicaid, the federal-state program for more than 70 million low-income people. The federal government would pay different amounts for different categories of beneficiaries, including children, older Americans and people with disabilities.
The bill would also repeal subsidies that the government provides under the Affordable Care Act to help low-income people pay deductibles and other out-of-pocket costs for insurance purchased through the public marketplaces. Eliminating these subsidies would cause turmoil in insurance markets, insurers and consumer advocates say.
However, the House Republicans would provide states with $100 billion over nine years, which states could use to help people pay for health care and insurance.
The tax credits proposed by House Republicans would start at $2,000 a year for a person under 30 and would rise to a maximum of $4,000 for a person 60 or older. A family could receive up to $14,000 in credits.
Even with those credits, Democrats say, many people would find insurance unaffordable. But Republicans would allow insurers to sell a leaner, less expensive package of benefits and would allow people to use the tax credits for insurance policies covering only catastrophic costs.
While Republicans have argued over how to proceed, Mr. Trump has expressed only vague goals for how to repeal the Affordable Care Act and improve the nation’s health care system. On Capitol Hill, lawmakers and their aides are waiting to see whether he uses his platform, Twitter account and all, to press reluctant Republicans to get behind the House plan.
The new version of the House Republican bill makes several changes to earlier drafts of the legislation.
It drops a proposal to require employees with high-cost employer-sponsored health insurance to pay income and payroll taxes on some of the value of that coverage. In addition, it would delay a provision of the Affordable Care Act that imposed an excise tax on high-cost insurance plans provided by employers to workers.
Congress had already delayed this “Cadillac tax” — despised by employers and labor unions alike — by two years, to 2020. The new legislation would suspend the tax from 2020 through 2024.
House Republicans would offer tax credits to help people buy insurance if they did not have coverage available from an employer or a government program. Under earlier versions of the bill, the tax credits increased with a person’s age, but would not have been tied to income. Backbench Republicans said the government should not be providing financial assistance to people with high incomes.
Accordingly, under the new version of the bill, the tax credits would be reduced and eventually phased out.
Earnings season continues
FEB 24, 2017 | BY ALLISON BELL
Scott Flanders, the chief executive officer of eHealth Inc., said today that he thinks the Trump administration wants to shut down HealthCare.gov
Former President Barack Obama's U.S. Department of Health and Human Services set up HealthCare.gov to provide Affordable Care Act exchange administration services for states that are unwilling or unable to handle ACA exchange enrollment services themselves.
"I've heard from two senior officials in the administration that it is their ambition to shut down HealthCare.gov," Flanders told securities analysts today during conference call.
Even if HealthCare.gov continues to operate, it might become a health plan information site, rather than an enrollment and e-commerce site, Flanders said. Once more people realize that running HealthCare.gov costs $1.9 billion per year, pressure to revamp it is likely to increase, Flanders predicted.
Flanders' company, the Mountain View, California-based parent of eHealthInsurance.com, held the conference call to go over fourth-quarter earnings. The company reported a net loss of $17 million for the quarter on $44 million in revenue, compared with a net loss of $12 million on $50 million in revenue for the fourth quarter of 2015.
The number of relationships with Medicare plan enrollees increased 33 percent, to 304,900, but the number of relationships with users of commercial individual major medical coverage fell 28 percent, to 360,600.
Flanders said policymakers have to make big changes soon if they want to see insurers offer commercial individual coverage in 2018.
The market has started to collapse, and the collapse is accelerating, Flanders said. Already, he said, eHealthInsurance.com has no individual products to offer consumers in some markets.
Carriers are still leaving the individual market, and some of the remaining players have stopped paying commissions on sales of individual products because the business is so unprofitable, Flanders said.
"If no action were to be taken in this market, there won't be one for the 2018 enrollment year," Flanders said. But Flanders said he is optimistic about how the Trump administration will respond to the problems.
The administration is "highly oriented to eliminating waste and government interference with the private sector," Flanders said.
Managers of HealthCare.gov have had a complicated relationship with web brokers, and Flanders said a shift of HealthCare.gov out of the health insurance sales business should be good for eHealth. For now, Flanders said, eHealth is trying to focus on increasing sales of Medicare plans and of coverage to employers with 20 or fewer employees.
KHN Morning Briefing
Summaries of health policy coverage from major news organizations
A federal court judge ruled last month that the $34 billion merger would hurt competition in the insurance industry. As part of the deal, Aetna will give Humana $1 billion as a break-up fee,
CNBC: Aetna, Humana End $34 Billion Merger Agreement
Aetna and rival Humana are terminating their merger, after their $34 billion deal was blocked by a federal court on antitrust grounds. Aetna will pay Humana a $1 billion break-up fee, in accordance with the agreement. (Coombs, 2/14)
Reuters: Aetna, Humana Walk Away From $34 Billion Deal After Court Ruling
After the Jan. 23 court ruling, Aetna and Humana had said they were weighing whether to appeal the decision and extend their agreement, which was set to expire on Feb. 15. Aetna and Humana announced the deal in July 2015, just a few weeks before Anthem Inc and Cigna Corp said they would also combine. A year later, the U.S. Justice Department sued to block both transactions and won in separate lawsuits, derailing what would have been a massive industry consolidation to three insurers from five. (Humer, 2/14)
Hartford (Conn.) Courant: Aetna, Humana Call Off $37 Billion Deal
"While we continue to believe that a combined company would create greater value for health care consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction," [Aetna Chief Executive Officer Mark] Bertolini said. "We are disappointed to take this course of action after 19 months of planning, but both companies need to move forward with their respective strategies in order to continue to meet member expectations," Bertolini said.
The Wall Street Journal: Aetna, Humana Mutually End Merger Agreement
The end of their deal, which would have forged a diversified insurance powerhouse, leaves both insurers with challenges as they forge separate paths forward. ... In his ruling last month, U.S. District Judge John D. Bates said the merger would unlawfully threaten competition, harming seniors who buy the private Medicare coverage known as Medicare Advantage. The 156-page decision said that combining the two companies likely would lead to a substantial lessening of competition for Medicare Advantage plans in 364 counties. (Wilde Mathews, 2/14)
Bloomberg: Aetna, Humana Abandon $37 Billion Merger Blocked By Judge
Aetna and Humana, which had agreed to combine in July 2015, are free to make new deals or spend billions of dollars on buying back their own shares. Another massive health insurance deal, meanwhile, is grinding forward -- for now. Anthem Inc. said on Monday that it’s seeking a fast-track appeal of a different judge’s ruling that blocked its own proposed $48 billion acquisition of Cigna Corp. (Tracer, 2/14)