U.S. House Republicans Release ACA Repeal and Replacement Draft

March 10, 2017

An initial draft of the much-awaited replacement legislation for the Affordable Care Act (ACA) was released March 6 including anticipated proposals to change the insurance markets and fundamentally change how Medicaid is financed. The bill, named the American Health Care Act, was being marked up this week by two separate House committees. 

The bill has been receiving much scrutiny and is seeing opposition among both conservative and democratic groups. As reported by the Associated Press, Wisconsin Gov. Scott Walker, who is currently chair of the Republican Governor’s Association, believes “more work needs to be done” on the bill. 

At issue for Medicaid is how states are funded now and into the future, given that some states chose to expand their programs under the ACA’s Medicaid expansion rules and received higher federal funding for doing so. Wisconsin instead chose a “partial expansion” approach, adding about 130,000 childless adults to its program, without receiving enhanced federal funding. Wisconsin is one of 19 states that did not take the expansion as defined by the ACA and the previous Administration. If parity between non-expansion and expansion states is not addressed, funding inequities could be locked in for future years. 

The legislation would change Medicaid funding to a per capita allotment, but allow expansion states to continue to receive their enhanced federal funding through 2020. Non-expansion states, like Wisconsin, would receive a portion of a new “safety net funding pool” based on their share of the population with income below 138 percent FPL. 

As reported in Wisconsin Health News, WHA President/CEO Eric Borgerding noted that even though the bill makes a few steps toward addressing funding inequity, Wisconsin would still end up with “the short end of the stick.” WHA estimates that under the bill, Wisconsin could be eligible for about $70 million in the new safety net funding pool. However, if Wisconsin’s partial expansion is counted on par with expansion states, Wisconsin would be getting about $250 million.

The legislation would make several other changes to the insurance markets, such as removing the individual and employer mandates for coverage, changing how insurance companies could set premium rates based on age and changing the current income-based tax credits for purchasing coverage to new credits based primarily on age. Borgerding noted these new age-based credits could negatively impact a state like Wisconsin that relied heavily on the income-based credits to help low-income individuals buy coverage in the private market. 

The U.S. House Ways and Means Committee advanced its portion of the bill, and the U.S. House Energy & Commerce Committee approved its bill March 9. Both bills will now move to the House Budget Committee where they will be merged. Republican leadership reportedly hopes to move the merged bill to House floor in the next few weeks.

This story originally appeared in the March 10, 2017 edition of WHA Newsletter