Summary of the House Republican Plan – “A Better Way”? Part 2
In most ways, the new plan is same old, same old. It proposes block grants of the Medicaid program to the states, creates Medicare vouchers, adds in a Cadillac benefits tax for employer plans, repeals most but not all of the Obamacare consumer protections and payment reforms. It adds in a flat refundable tax credit for the uninsured. It keeps some consumer protections for those who maintain continuous and uninterrupted coverage and repeals them for most every one else.
Here are the summaries on the Refundable Tax Credit and Consumer Protection provisions. I would urge you to read the full 37 pages of text, so you are well-educated in these times of electoral confusion and potential tumult. I will follow up with blogs on the cost containment and employer coverage provisions in Part 3 of this series.
Refundable Tax Credit Summary: less subsidy, more out of pocket, fewer covered services, fewer people covered and more regressive
Under Obamacare, the private individually insured and the uninsured have access to refundable tax credits to help pay their premiums and their out of pocket costs of health care. These credits are available through Exchanges (state or federally operated purchasing pools). Over 1.5 million Californians are enrolled in coverage through the state Exchange (Covered California) and over 90% receive refundable tax credits to reduce their costs of coverage and care.
1. The House Republican proposal would replace the progressive refundable tax credits of Obamacare with a flat refundable tax credit. The Obamacare tax credits decrease with income so that higher income individuals get less assistance while lower income individuals get more help paying their premiums. The House Republicans propose a flat tax credit for all the uninsured and for all without an offer of employer coverage. Thus an individual billionaire, like Donald Trump, would receive the same size tax credit as the minimum wage individual to help pay for coverage.
2. Less subsidy and less protection against premium increases. The House Republicans criticize the Obamacare tax credits as being too generous and growing with the rate of increase in health insurance premiums. They specify their proposal would be less generous and grow more slowly, but give no clue as to what would be the level of subsidy or the growth rate.
3. Fewer covered services and higher copays. Obamacare decided on 10 essential services (like hospitals, doctors, prescriptions, mental health and prevention) and specified that the minimum plan must cover 60% of their costs. The House Republicans say that package was too generous but do not specify what services are covered and what would be the copays in their proposal.
4. Pools vs. Puddles. Obamacare used state or federal purchasing pools to negotiate coverage and deliver the subsidies. The House Republicans propose to use multiple private pools instead of a single purchasing entity. Covered California has been particularly successful at negotiating favorable rates with health plans.
Consumer protections: fewer protections, fewer services, less financial security
The House Republicans propose to repeal virtually all the consumer protections in the ACA. The proposal would eliminate Obamacare’s consumer protections such as guaranteed issue, guaranteed renewal, bars of pre-existing exclusions, annual open enrollment, rate bands, medical loss ratios, protections for pregnant women, assured access to preventive care, restrictions on annual and lifetime benefit caps, ten essential health benefits and limits on out of pocket spending.
1. The House Republican proposal would retain the option for parents to include their children on their own plan up to age 26.
2. They would bar plans from rescinding coverage to those who become ill.
3. Individuals who maintain continuous coverage at all times could not be charged more than the standard rate.
4. $25 billion would be set aside for state operated high-risk pools for the medically uninsurable which cannot be capped or wait listed for enrollment.
5. $25 billion would be set aside for innovative state initiatives to reduce individual and small group premiums.
6. Plans could charge older individuals up to five times as much as they charge the young.
7. There would be a time only opportunity for the uninsured to join health coverage after that they can be excluded or charged exorbitant rates.
8. Providers and plans would have conscience rights with respect to covering and delivering family planning services and abortions.
Prepared by: Lucien Wulsin
Dated: July 6, 2016