The Sacramento Bee

GOP reveals Obamacare repeal plan, alarming California Democrats

March 6, 2017

By Tony Pugh, Alex Daugherty, Claudia Buck and Sammy Caiola

WASHINGTON - Long-awaited legislation announced Monday night to repeal and replace the Affordable Care Act immediately raised cries of dismay among Democratic legislators and consumer health advocates in California. House Republicans in Washington, D.C., called it a necessary fix.

The bill, part of President Donald Trump’s campaign promise to dump Obamacare, sparked fears from some that millions of Americans will lose health coverage.

“It’s even more bleak than we thought,” said Nadereh Pourat, a health economist and director of research at the UCLA Center for Health Policy Research. “It depends on how you define ‘repeal and replace.’ All I see here is repeal. And a reduction in (health care) benefits.”

As proposed, the bill would: wipe out the individual mandate requiring all Americans to have health coverage; replace Obamacare’s income-based subsidies with tax credits based more on age; bar federal money for Planned Parenthood and phase out expanded funding for newly eligible Medicaid recipients, and eliminate tax deductions for employers who provide health insurance. It would also reduce federal funds for certain state and local public health programs tackling contagious diseases such as the Zika virus and measles outbreaks.

The House Energy and Commerce Committee and the Ways and Means Committee are expected to take up the measure at hearings on Wednesday, which would set the stage for the proposals to be merged into a final bill next week by the House Budget Committee.

The GOP chairman of the Energy and Commerce Committee, Greg Walden of Oregon, said the legislation represents an important step in making good on Republican efforts to repeal the Affordable Care Act.

“We’ve spent the last eight years listening to folks across this country, and today we’re proud to put forth a plan that reflects eight years’ worth of those conversations with families, patient, and doctors,” Walden said in a statement. “We are moving forward united in our efforts to rescue the American people from the mess Obamacare has created.”

The Republican legislation hasn’t been scored by the Congressional Budget Office for its cost and impact. But most experts expect fewer people to get coverage under the GOP plan than under former President Barack Obama’s Affordable Care Act.

Since the federal health reform launched in 2010, about 20 million Americans gained health care coverage, many for the first time. In California, close to 5 million residents have relied on federal subsidies to enroll in Medi-Cal or in private plans through the Covered California exchange.

California’s uninsured rate has dropped by half – from 16.4 percent in 2013 to 8.6 percent in 2015 – under the Affordable Care Act, largely due to enrollment gains among low-income individuals, particularly Latinos.

The GOP proposal calls for repealing the health law’s Medicaid expansion and would force states to bear more of their Medicaid costs or limit their eligibility.

Anthony Wright, director of consumer advocacy group Health Access, said the proposed replacement plan unravels the progress of the last eight years and will have a disproportionate impact on California, which insured more people under the Medi-Cal expansion than any other state.

“The amount of money it would take to backfill this cut in this proposal is tens of billions of dollars,” Wright said. “Our Plan A needs to be to get our congressional representatives to not vote for a proposal that is so diametrically destructive to California’s health care system.”

It’s unclear whether the GOP proposal will retain enough Republican votes to pass.

Senate Republicans are hoping to vote on the measure before the end of March, but four Republican senators – Rob Portman of Ohio, Shelley Moore Capito of West Virginia, Cory Gardner of Colorado and Lisa Murkowski of Alaska – told Senate Majority Leader Mitch McConnell on Monday that previous House drafts did not provide enough support for newly eligible enrollees who gained coverage under the Affordable Care Act’s Medicaid expansion.

If those four Republicans withhold support for the proposal, the bill would have a tough time getting the 60 votes needed for passage.

The bill would continue the federal law’s requirement that insurers provide access to coverage for all, including those with pre-existing medical conditions. But insurers could charge 30 percent more for coverage to plan members who have let their insurance lapse.

The GOP plan would offer a tax credit to all who purchase individual insurance, based on age and income and adjusted annually for inflation. GOP lawmakers wanted the tax credits to go to all who purchase individual insurance, both within and outside the insurance marketplace. But faced with concerns that the plan would provide an entitlement to the wealthy, Republicans have proposed reducing the tax credit for individuals who earn more than $75,000 and for joint income filers who earn more than $150,000.

Tax credits would start in the $2,000 range for those in their 20s and grow to roughly $4,000 for those over 60.

Critics contend that the new proposal could backfire, raising rates for everyone, including those with health care provided by their employer.

State Sen. Richard Pan, D-Sacramento, said the combination of dropping mandatory coverage and basing tax credits on age, not income, could raise premium rates for a wide swath of Americans. He said healthy, younger people will likely opt out, causing insurance companies to raise rates to cover a sicklier population of those insured.

“I think they’ve managed to do a good job in making sure everyone with health insurance will get worse coverage with fewer benefits,” Pan said. “When you give people tax credits that aren’t sufficient to pay their insurance premiums, I don’t see how it will help reduce health care costs or help people do comparison shopping. I see it potentially driving up health care costs, certainly not slow the progression we’ve had. It would look like we’re going back to pre-(health reform) days when you saw double-digit premium increases.”

In recent weeks, polls increasingly showed that Obamacare has grown in popularity. A McClatchy-Marist poll in February found little support for repealing Obamacare. Fifty-eight percent of Americans either wanted the Affordable Care Act to remain a law or to change it so that it does more, the poll found.

In a statement, Bruce Siegel, president and CEO of America’s Essential Hospitals, which provide care to many low-income patients, said the group was “particularly disappointed” about the lack of Congressional Budget Office analysis to determine the impact of terminating the Medicaid expansion and shifting Medicaid’s funding formula.

“These changes alone could result in deep funding cuts for essential hospitals, which now operate with little or no margin,” Siegel said. “Our hospitals could not sustain such reductions without scaling back services or eliminating jobs.”

Without knowing the impact, he said, “there are too many unknowns and too great a risk of coverage losses without affordable alternatives for many Americans.”

The Republican bill would also resurrect high-risk pools to provide coverage for hard-to-ensure plan members. The GOP proposal would provide $100 billion for the risk pools over 10 years and allow states to use them to provide financial support for low-income enrollees who might not be able to afford coverage with the flat tax credit.

In California, high-risk pools were previously tried without success, according to Pan, with long waiting lists of those with chronic conditions trying to obtain coverage from an underfunded program.

During the recent open enrollment period, Covered California continued to encourage health insurance signups, even as the threat of repeal and replacement loomed. After November’s election, with Trump expected to follow through on campaign promises to eliminate the Affordable Care Act, state Democratic leaders said they would fight to continue the Covered California health insurance marketplace and expanded Medi-Cal, regardless of what happens to federal subsidies.

In California and Washington, D.C., reaction fell largely along partisan lines.

“The Republican repeal bill would rip health care away from millions of Americans, ration care for working families and seniors, and put insurance companies back in charge of health care decisions – contrary to everything President Trump has said he would do with his health care plan,” said Democratic Reps. Frank Pallone of New Jersey and Richard Neal of Massachusetts in a joint statement. Pallone and Neal are the ranking members of the two committees that will consider the bill on Wednesday.

At the White House, spokesman Sean Spicer called the Affordable Care Act “a disaster” and said the Republican bill is a “step toward restoring health care choices and affordability back to the American people.”

“President Trump looks forward to working with both chambers of Congress to repeal and replace Obamacare.”