March 21, 2017

House GOP leaders unveil last-minute changes to ACA repeal plan

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    Read Advisory Board's take on this story.

    House Republican leaders on Monday unveiled a so-called manager's amendment that includes their last-minute changes to the House GOP's plan to repeal and replace the Affordable Care Act (ACA), which already had been passed by several House committees.

    According to The Hill, lawmakers typically use a manager's amendment to make changes to a bill intended to gain more support for the measure after the traditional committee process occurs but before the bill reaches the House or Senate floors.

    Among the notable additions are an at least $75 billion fund to make health care more affordable for older U.S. residents and a provision to encourage Medicaid work requirements. According to Axios' "Vitals," House leaders crafted the amendment in an effort to build support for the bill, called the American Health Care Act (AHCA), among both conservative and moderate House Republicans.

    It remains unclear, however, whether the changes will attract enough to support to enable the bill to pass the House.

    Amendment details

    Among other changes, the amendment would:

    • Provide extra federal funding to states that choose to implement work requirements for able-bodied Medicaid enrollees;
    • Allow states beginning in fiscal year 2020 to choose whether to receive Medicaid block grants or per capita allotments;
    • Delay implementation of the ACA's so-called "Cadillac Tax" for another year, from 2025 to 2026;
    • Eliminate a provision that would allow individuals to shift leftover tax credit money to their health savings accounts;
    • Prohibit New York from receiving federal matching funds for certain county-level Medicaid taxes;
    • Prohibit states that have not yet expanded Medicaid under the ACA from doing so after Dec. 31;
    • Provide a higher Medicaid inflation adjustment for elderly and disabled enrollees; and
    • Repeal certain taxes implemented under the ACA at the end of 2017, which is one year earlier than initially was proposed in the plan.

    The amendment also would create a new reserve fund of at least $75 billion for tax credits created under the plan, targeted at making insurance more affordable for those between the ages of 50 and 64. However, the amendment does not change the way the tax credits would be structured, nor does it indicate how the structure should be changed.

    The 4 key numbers for hospitals in CBO's analysis of the GOP health bill

    According to Axios, many moderate Republicans have said the legislation should provide more assistance to low-income, older U.S. residents. According to the Washington Post's "PowerPost," House GOP leaders said the amendment "provides the Senate flexibility to potentially enhance the tax credit" for older U.S. residents.

    The amendment would not repeal the ACA's insurance regulations, as called for by some conservative lawmakers.

    Some conservative lawmakers could continue to oppose AHCA

    According to "Vitals," the amendment might not go far enough to sway some conservative lawmakers to support the bill. Rep. Mark Meadows (R-N.C.)—who chairs the House Freedom Caucus, which has opposed the bill—said the caucus will not take a formal position on the potentially amended AHCA, but added that the amendment "does not address any of the [caucus'] concerns in a meaningful way."

    Still, according to "PowerPost," the caucus' neutral stance suggests that its members might not uniformly vote against the bill, which would increase the legislation's chances of approval in the House. Meadow said, "I'm trying to let my members vote the way that their constituents would want them to vote."

    24M more would be uninsured under House GOP bill, CBO estimates

    The changes also could sway moderate Republicans to support the bill, "PowerPost" reports.

    Next steps

    The House Rules Committee on Wednesday is scheduled to consider the measure and the amendment. The full House is expected to vote on the final package on Thursday, Axios reports.

    The AHCA must get 216 favorable votes to pass through the House. Republicans hold a majority of 237 seats in the chamber. The bill likely will not have any Democratic support in the House, meaning the vote would not pass if more than 21 Republicans vote against the measure.

    (Nather, "Vitals," Axios, 3/21; Kamisar, The Hill, 3/14; Owens, Axios, 3/20; Meyer, Modern Healthcare, 3/20; Manger's Amendment summary, accessed 3/21; Abutaleb/Cowan, Reuters, 3/21; DeBonis, "PowerPost," Washington Post, 3/20; Haberkorn et al., Politico, 3/20; Haberkorn, Politico, 3/20; Morse, Healthcare Finance News, 3/20).

    Advisory Board's take

    Eric Cragun, Senior Director, Health Policy

    The changes made to the bill may make it more likely to pass the House. But they don't change the potential broader financial implications of the AHCA for providers: the net result from the bill would still likely be an increase in the number of uninsured and a drop in provider revenue. It is worth noting that we are awaiting a CBO score on the revised bill, the bill is likely to be modified further, and passage remains uncertain in both the House and Senate.

    Monday's changes would have some incremental impact for providers, with mixed effects for providers' bottom lines. The AHCA’s Medicaid per capita caps would rise faster for certain populations, which would help providers by putting less pressure on states to reduce or modify Medicaid eligibility, benefits, and payment rates. And the expected additional tax credits for older, lower-income individuals could help somewhat reduce how many people would lose coverage under the bill (before the latest changes, CBO predicted the AHCA would lead to 24 million more people uninsured by 2026).

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    However, the new options for states to implement work requirements and/or shift to block grants in Medicaid could negatively affect providers' finances by reducing Medicaid enrollment and payments. And—although we are awaiting potential changes to the tax credits in the Senate—none of the current changes would likely be enough to completely stem reduced enrollment in the individual market.

    To learn more about the key issues providers should watch in the early days of the Trump administration, check out our executive research briefing, "Navigating the First 100 Days of the Trump Administration."

    See the 5 key issues to watch

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