Republican leaders outline plan to replace Affordable Care Act

WASHINGTON — House Republican leaders Thursday revealed the outlines of their plan to replace the Affordable Care Act, leaning heavily on tax credits to finance individual insurance purchases and sharply reducing federal payments to the 31 states that have expanded Medicaid eligibility.

Speaker Paul D. Ryan and two House committee chairmen presented the plan to House Republicans at a meeting attended by the new secretary of health and human services, former Rep. Tom Price of Georgia.

The Republican plan includes tax credits to help people buy insurance and new incentives for consumers to establish savings accounts to pay medical expenses. The tax credits would increase with a person's age, but — unlike the assistance provided under the Affordable Care Act — would not vary with the amount of a person's income.

The House Republican plan would also make it easier for consumers to buy insurance from insurers licensed in other states, an idea long promoted by Republicans in Congress and championed by President Donald Trump in his campaign last year.

But the outline did not say how the legislation would be paid for, essentially laying out the benefits without the more controversial costs. It also included no estimates of the number of people who would gain insurance through the plan, nor did it include comparisons to the Affordable Care Act, which covers about 20 million people.

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With the House proposal's rollback of Medicaid payments to the states, there is little doubt that the number covered would be smaller.

Ryan said Republicans would give states "more control over Medicaid" and were trying to find a way to accommodate states that have expanded Medicaid eligibility, as well as states that have not done so.

House Republicans were given a packet of talking points and legislative proposals to take with them when they return home for the Presidents Day recess next week.

"After the House returns following the Presidents Day," Ryan said, "we intend to introduce legislation to repeal and replace Obamacare. It has become increasingly clear that this law is collapsing. People's premiums are getting higher and higher. Their deductibles are soaring, and their choices are dwindling."

Price told House Republicans that Trump "wants to repeal and replace concurrently, and he is absolutely committed to that," a person who was in the room reported.

"The president is all in on this," Price said. He urged lawmakers to embrace the president's timetable, saying: "Let's not miss this opportunity. Let's go shoulder to shoulder, arm to arm."

Sen. Lamar Alexander, R-Tenn., and chairman of the Senate health committee, said that he and other Senate committee chairmen were working with their House counterparts, with the goal of developing a "consensus document." The House, he said, will probably act first but "will have the input of senators and the president."

Ryan's presentation Thursday was meant to generate a sense of momentum for the Republicans' campaign to eviscerate President Barack Obama's health care law — a campaign that has been plagued by apprehensions, doubts and divisions among Republicans in the last few weeks.

The plan unveiled Thursday by House Republican leaders would make huge changes in Medicaid, the federal-state program for more than 70 million low-income people.

House Republican leaders said they would roll back the Affordable Care Act's expansion of Medicaid and give each state a fixed amount of money for each beneficiary. As an alternative, they said, states could receive a lump sum of federal money for all of its Medicaid program, or a block grant.

In either case, the federal government would gradually reduce the extra payments it makes to states that have expanded Medicaid under the 2010 health care law. States could continue providing Medicaid to the newly eligible beneficiaries, but the federal share of the costs would decline to the regular federal share of Medicaid costs for other beneficiaries.

The federal government now pays more than 90 percent of the costs for newly eligible beneficiaries in states that expanded Medicaid. Under the House Republican plan, the federal share would decline to 50 percent in states like California, Connecticut, New Jersey and New York, resulting in a significant loss of federal revenue.

In a document describing their plan, House Republican leaders said they would not "pull the rug out from anyone who received care under states' Medicaid expansions."

But Kenneth E. Raske, the president of the Greater New York Hospital Association, expressed alarm at the House Republican proposals, saying they "put a huge amount of pressure on state budgets and put many Americans at risk of losing health care coverage."

Raske urged hospital executives to express their concerns when members of Congress returned home for the recess next week.

In the document describing their proposal, House Republican leaders say they would "put Medicaid on a budget." That would be a significant change. Medicaid is now an open-ended entitlement. States receive more federal money if their costs go up because of an increase in enrollment in an economic downturn, or an increase in medical costs because of expensive new drugs.