Last Thursday, February 16, Speaker Paul Ryan went before his Republican caucus to unveil the leaderships repeal and replace plan for the Affordable Care Act. That plan outlined in a white paper still left questions in the minds of some members fearing it didn’t go far enough in its repeal or maybe went too far in the replacement. Ryan said that the majority party plans to take up their bill after the Presidents Day recess. It is unclear what that means, whether it will come up next week in committee or perhaps several weeks later into March.
President Trump, in last Thursday’s news conference indicated that they would send up a plan in early or mid-March. What is being presented by the House leadership is not much different than some of the general descriptions that have been circulating in Washington for several weeks.
The plan is to pick up the repeal bill that was passed in the last Congress and that was vetoed by President Obama and to add to it. The white paper, while long on rhetoric is limited on detail, but does offer some insight. The House plan will add in health savings accounts, tax credits of undetermined amounts, will allow people to buy health insurance across state lines, and allow states to have high-risk insurance pools for people who are refused health insurance due to a pre-existing condition.
HIGH RISK POOLS
High risk pools are central to the plan. One of the most popular provisions of the ACA is that it bans insurance companies from denying health coverage because an individual has a health condition or preexisting condition. The President has said he would keep that provision. But as an alternative, Congressional Republicans say they will provide funding for states to establish high risk pools for people unable to buy insurance on the market. The problem is that high risk pools have not worked. The Commonwealth Fund has written on why they don’t work. In their past analysis based on the experience of several state attempts, high risk pools can require premiums sometimes 250 percent higher than the individual insurance market and still require annual deductibles of $25,000 per year.
A recent report by National Public Radio indicated that Speaker Ryan is proposing $25 billion for high risk pools over ten years. That same report cites the Commonwealth Fund estimates that to be effective these pools would cost $178 billion a year.
MEDICAID BLOCK GRANTS
In addition to those long talked about provisions, the House plan would include cut backs on Medicaid coverage. In the white paper the House Republicans call for per capita caps. The amount of the federal allotment will be “the product of the state’s per capita allotment for major beneficiary categories —aged, blind and disabled, children, and adults—multiplied by the number of enrollees in each group.” They also say that states would have an option for a block grant. Per capita caps amount to a complex form of block grants and combined with the block grant option, eliminate the individual entitlement in health care coverage that exists now.
Block grants have been traditionally inadequate in meeting future needs. The 1996 TANF block grant has lost 32 percent of its value due to inflation (Congressional Research Service). SSBG not only has lagged due to inflation which would have it at more than $7 billion today, but SSBG has been subject to extreme cuts of more than $1 billion cut down to $1.7 billion and it has a bullseye for elimination in some parts of this Congress. A child welfare block grant passed by the House of Representatives in 1995 would have gradually increased state funding over five years topping out at slightly more than $5 billion in 2000. A CWLA analysis conducted in 2002 showed that states would have lost anywhere from 57 percent to two percent by year 2000 with only three states gaining. That was 17 years ago. In 2016 states drew down over $7.6 billion in Title IV-E alone compared to the $5 billion block grant total provided by the 1995 legislation. When IV-B is included, that would have left states with approximately $3 billion less than they received through Title IV-E and Title IV-B in 2016.
It is possible the House could begin action when they come back in the two key committees, the Ways and Means and the Energy and Commerce committees, and then wait until later in March to take it up on the floor.