The Healthcare Policy Debate: Part II--Inside The House Bill

This is the second part in a series analyzing the political and policy aspects of the current healthcare debate. Part I examined the first House bill from a political perspective. Part II assesses the second House bill, and Part III the Senate bill. The same discussion outline--categorizing elements of the bill by their Effects on Individuals, Employers, Industry and States--will be utilized in all parts of the series.

THE U.S. HOUSE OF REPRESENTATIVES BILL:

H.R.1628 was passed (with amendments) on May 4, 2017. The vote on an earlier version was cancelled by Speaker Ryan

because GOP defections made passage impossible. [See The Healthcare Bill Vote: Why Canceling It Mattered on THE PoP BLOG! for more on this.] Here are the details on 1628.

Effects on Individuals

The House bill maintains the mandate to be insured but removes the tax penalty for not doing so. Moreover, subsidies for individual policy purchasers (the amount of which depends on the purchasers' income and the price of their premiums) would be supplanted by age-dependent tax credits that must be utilized for premium payments.

These tax credits can not be applied to any policy that covers abortion. 

Further, taxes on high earners, designated to help defray the costs of the Patient Protection and Affordable Care Act (also known as the A.C.A. and Obamacare), would be eliminated. But, Medicare premiums increase for them.

Lastly, premium subsidies can be applied to policies not purchased on the exchanges.

Effects on Employers

The requirement for employers--with over 50 full time employees--to offer health insurance would be dropped in the House bill.

The tax on high-end, employer-sponsored health plans is also repealed.

Tax deductions for employers who receive subsidies to provide Medicare Part D are reinstated.

Effects on Industry

Taxes imposed by the A.C.A. on insurers, pharmaceutical companies, medical device companies, and tanning salons, would be repealed by the 1628.

Insurers are obliged to surcharge policy purchasers (by 30 percent) who were uninsured for more than 63 days before requesting coverage.

Insurers must also continue covering dependents until they are 26 years of age, and refrain from using gender in premium calculations.

The requirement to include abortion coverage is removed in H.R.1628.

Effect on States

Most of the language in H.R.1628 impacts the states. The whopper is the cessation of federal payments for the A.C.A.'s Medicaid expansion. Further, the disbursement methodology is fundamentally altered. Specifically, the Medicaid program would no longer use a fee-for-service model, substituting an annual block grant approach.

States would also receive subsidies to help the newly insured afford coverage, splitting $13 billion a year for ten years. Additionally, $8 billion over five years is allocated to support state funded high-risk pools. Finally, $15 billion is allotted for certain types of specialty care, and another $15 billion for reinsurance costs. Total cost, $153 billion.

One group of provisions in the House bill allows states to request waivers of certain federal insurance regulations. Specifically, states would be permitted to apply for waivers of regulations that:

• require insurers to offer a defined minimum benefit package with no annual dollar or lifetime limits
• limit the amount that insurance companies can charge older policy holders, relative to younger ones, to a ration of 3:1. [Without a waiver request, this defaults to 5:1.]
  
• prohibit insurers from charging higher premiums for policies issued to people with preexisting conditions. [Additionally, to qualify for the waiver, the state must have a high-risk pool or equivalent, and only allow this benefit to be applied to individuals who have not have been continuously insured.]

States may require able bodied Medicaid recipients to work in order to maintain their eligibility.

Health insurance marketplaces are maintained, and the use of health savings accounts is incentivized primarily by increasing contribution limits, in the House bill.

The Prevention and Public Health Fund, and Planned Parenthood clinics, are defunded.

Stay tuned for Part II of this series, which will take up the Senate's healthcare bill... as soon as it passes.

Special thanks to the Kaiser Family Foundation