House GOP announces plan to repeal health care law

WASHINGTON — House Republicans released a long-awaited Obamacare replacement Monday that would dismantle the health care law’s extensive system for expanding health insurance coverage to millions of Americans.

The legislation, the first such bill House Republican leaders have produced, would eliminate hundreds of billions of dollars of federal aid that has allowed states to expand their Medicaid programs to millions of previously uninsured poor people.

And the bill — called the American Health Care Act — would restructure a system of tax subsidies that have helped millions of working Americans who don’t get coverage through an employer to buy health plans.

In all, the plan would probably take away health coverage from several million Americans and raise costs for many more, especially low-income people and the middle-aged. But it would immediately end the requirement that all Americans have insurance, which has been highly unpopular, especially with Republicans, reduce federal authority over the health care system and provide a huge tax cut to upper-income families.

The plan’s impact on the federal deficit is unclear because House Republicans did not release a cost estimate for the proposal.

The bill, the first step in what could be a long and arduous legislative effort to fulfill a key Republican campaign promise, includes several provisions that appeal to conservatives.

In addition to doing away with taxes created by the Affordable Care Act and the mandate that Americans have health insurance or pay a penalty, it would ban federal funding for Planned Parenthood and any other medical institutions that provide abortion services, another longtime GOP promise.

Though it would continue to provide aid to help people buy health plans, it would prohibit Americans from using those subsidies to buy health insurance that covers abortions.

Despite those provisions, the bill faces opposition from many conservatives who say it does not go far enough in uprooting the current law.

The bill also faces attack from some Senate Republicans who are concerned about any plan that eliminates existing Medicaid coverage.

The critiques from both left and right underscore the difficulty the GOP leadership faces in pushing the bill, despite the Republican majorities in both the House and Senate.

House Republicans did not release any analysis of the bill’s effect on insurance coverage, a crucial omission.

Such analysis, which is expected to show that millions of people would lose coverage, could be a political bombshell for the GOP. The current law is credited with extending coverage to more than 20 million previously uninsured Americans and driving the nation’s uninsured rate to the lowest levels ever recorded.

With a few notable exceptions, the legislation released Monday reflects health care plans that House Republicans have been working on for years but have never put into legislative language.

Starting in 2020, the bills would phase out hundreds of billions of dollars in federal aid that has allowed 31 states to expand their Medicaid programs, a key pillar of Obamacare.

After 2020, states could continue to provide expanded coverage, but they would have to pick up substantially more of the cost, a disincentive that would likely force many states to scrap the expanded safety net.

Equally important, the House bill would dramatically change federal support for Medicaid, effectively capping future aid to states.

The House GOP plan would also restructure insurance marketplaces created through Obamacare for Americans who don’t get health benefits at work.

Though the legislation prohibits insurers from turning away sick people, insurers would no longer be required to offer health plans that meet the same coverage standards, another protection in Obamacare. That could allow the sale of more catastrophic health insurance plans that impose higher deductibles on consumers.

People who go without insurance for more than a couple of months would face a 30 percent surcharge on their premiums — a provision designed to replace the current law’s mandate that people buy coverage.

The legislation would create a more limited system of subsides — refundable tax credits, as in the current law — to help people buy coverage.

Subsidies currently are linked to consumers’ income and to the price of health plans. That effectively offers the most protection to low-income people who live in regions of the country with expensive health insurance.

The House GOP alternative would instead link subsidies primarily to consumers’ age, with annual assistance ranging from $2,000 for people under 30 to $4,000 for those over 60. They would have a cap of $14,000 per family.

Republicans have insisted the Medicaid provisions and the subsidies will preserve coverage. “We’re going to make sure we’re not pulling the rug out from under people,” said Rep. Greg Walden, ROre., chairman of the House Energy and Commerce Committee.

But independent analysis suggests that many older and poorer Americans would probably end up paying more.

In a nod to criticism from some Republicans, senior House leaders agreed to phase out the federal assistance for higher-income households — single Americans making $75,000 a year or more and couples making $150,000 a year or more.

Bowing to criticism from leading business groups, House GOP leaders also dropped plans to begin taxing health benefits that are provided by employers, a proposal that was widely seen as political suicide.

The House legislation still eliminates major taxes in the current law, however, including levies on insurance companies and medical device makers and a tax on families making more than $250,000 a year. Elimination of the latter will amount to a huge tax cut for the country’s wealthiest taxpayers.

Without any alternative to these taxes to pay for their bill, House Republicans had to engage in some budget games, including keeping another unpopular Obamacare tax on generous health plans but delaying it for a few years.

The legislation is under fire from conservative Republicans, who charge that the party is creating a different government entitlement by replacing Obamacare’s subsidies with a system of its own.

Conservatives are being backed by the influential Koch network group, led by Americans for Prosperity, which promised a high-dollar ad campaign to push wayward Republican lawmakers to pass nothing short of a full repeal. The group is staging a rally Tuesday outside the Capitol to pressure GOP lawmakers.

Even if the legislation clears the House, it faces a tougher political landscape in the Senate, where Republicans hold a narrow majority.

On Monday, four Republican senators raised concerns that cutting Medicaid could hurt their most vulnerable constituents.

“We believe Medicaid needs to be reformed, but reform should not come at the cost of disruption in access to health care for our country’s most vulnerable and sickest individuals,” Sens. Rob Portman of Ohio, Lisa Murkowski of Alaska, Cory Gardner of Colorado and Shelley Moore Capito of West Virginia said in a letter to Senate Majority Leader Mitch McConnell.