March 7, 2017 by JImbo
And here it is *yawn* after going through it all.
I’ll break it down for you.
If you think this is boring… at least you didn’t READ IT ALL.
But if you need help getting to sleep tonight, here is the full text.
It hasn’t been voted on so it’s a draft, but I’ll summarize it for you.
The American Health Care Act
(GOP Obamacare Replacement Bill)
Part A Patient Access to Public Health Programs
Cuts remaining funding to Obamacare effective end of 2018
Adds $422 million to the “Community Health Center Program”
Relating to the previous section, the money is prohibited from being used by health centers that perform abortions (aka Planned Parenthood)… except where the abortion is due to rape, incest or medical complications.
Part B Medicaid Program Enhancement
Medicaid provision repeal unlinking it with Obamacare
Ends the Medicaid Expansion part of Obamacare
Money restored from Obamacare to “DSH” hospitals directly so they can cover more expenses at the local level.
Steps to reduce state health care costs
-States can exempt wealthy Lottery winners from public health care plans. (They qualified because they didn’t have regular “income” but were living on a heap of winnings. A loophole. This is actually about 5 pages of the 51 page bill explaining the exact terms of how much money is required to be a wealthy lottery winner…)
-Retroactive eligibility loophole closed
-No coverage for “those ineligible for coverage.” Essentially this means illegal aliens and non-citizens. Another loophole where the illegal family of an “anchor baby” qualified for coverage even though the plan said they weren’t.
-Adjusting Home equity limits
“Non-expansion” States can adjust payment amounts to medical providers, which they were prohibited from doing before.
-Also refers to the reimbursement of States by the Federal government.
-Changes eligibility requirement proof to 6 months instead of once a year.
-Increased fine for fraud of Medicaid.
-More funds for 2 years for State administrative costs as they transition to the new state-based system.
Part C- Per Capita Allotment for Medical Assistance
Explains and defines State reimbursement of Medical Assistance expenditures. Defines percentages and special cases of excess aggregate cost, etc. The amount each state is given will be determined on a per capita basis.
Subtitle D- Patient Relief and Health Insurance Market Stability
Establishment of a “State and Patient Stability Fund”
Section 2201 “establishment of the Program”
Section 2202 “use of funds”
Repeals cost-sharing provision of Obamacare for direct payments to insurance companies from the Federal government.
Uses of the fund:
1) Provide monetary help to high risk individuals without employer insurance to enroll in a health insurance plan in their state, be it private or a public state program.
2) Providing incentives to “entities to enter in arrangements with the state to stabilize the premiums in the health insurance market.” (I’m guessing this is going to be used to funnel more money to insurance companies like the repeal in Section 131, but at the State level, but the use of “entities” is rather vague and opens up strange possibilities)
3) Reducing costs to access to small group and individual markets for people with high-cost medical needs.
4) Increase options by encouraging more participation in the Individual and Small Group markets (individuals and businesses…I think)
5) Promote access to preventive services (wellness programs, dental,etc) as well as addiction recovery
6) “providing payments directly or indirectly to health care providers for the provision of such health care services as are specified by the Administrator.”
7) Providing assistance to individuals with out of pocket costs provided they are enrolled in an insurance policy in the state.
State Eligibility and approval
Basically, the States submit to the Administrator of the Fund what they want to spend money on every year by category. If they don’t get a rejection in 60 days, it is assumed to be automatically approved. Once approved, that funding type/purpose is approved until the year 2026. Money given to State programs ceases to be Federal money once paid to the State and becomes part of the State program’s budget for legal purposes.
(I THINK there is a subsection here that is trying over two pages to explain that claims in Part 2 of the previous section (“incentives to entities” can be between $50,000 to $350,000. It’s a big tough to decipher the run-on sentence that is confusing even by normal legalese standards and violates the rules of basic English sentence structure.)
Section 2204 Allocations
The fund is to be set up with an initial $15 billion per year to distributed to the states. This falls to $10 billion starting in 2020.
For each program the States set up to receive money from this fund, the States must pitch in a certain percentage of money compared to what the Federal fund contributes. This increases by year:
2020- State contributes 7% of the amount the Fund pays in to that specific program
2021- State contributes 14% “”
2022- State contributes 21% “”
2023- State contributes 28% “”
2024- State contributes 35% “”
2025- State contributes 42% “”
2026- State contributes 50% “”
Section 2711 “Continuous Health Insurance Incentive”
Insurance companies are allowed (encouraged) to charge a 30% penalty on new insurance policies for the first year if there was a break of more than 63 days between plans. So, if you switch directly from one policy to the other no worries. However, if you go without insurance for more than 63 days you are considered to have “broken coverage” and any company that does take you in can tack on that 30% extra penalty for the first year. This is supposed to encourage people to keep coverage once they have it. Also, I THINK this is supposed to punish people for using the “Obamacare loophole” which was that you could pay a fee to have NO insurance and then automatically get insurance when you get sick. This makes it a little more expensive to coast with no coverage and then use the “can’t deny coverage” loophole later.
In theory anyway.
Repeals Section 1302 of the ACA as of December 2019.
It looks like this removes the requirements for what an “approved” policy consists of at the Federal level. The States will be able to decide what “acceptable” insurance is. Not every plan has to have pediatric care and maternity care for example if you are elderly. It looks like the whole idea of a Federal exchange is removed, so no more bronze, silver, gold, etc plans. The States are responsible for running their own local markets. Those on the plans will have to buy into state plans instead.
Increases the allowable increases in premiums for age
- Health insurance executives can deduct their health care costs now apparently.
- The “Tanning Tax” is repealed.
-Repeal of Prescription Drug Tax
-Repeal of Health Insurance Tax on the health insurance companies
– Repeal of Net Investment Income Tax
– Repeal of Premium Tax Credit
-Repealing small business health insurance tax credits for plans which offer abortions
Repeals the Individual Mandate…sorta. Instead of repealing it, it “sets the penalty at zero dollars” which is problematic. That way they can use it again later. It should be taken out entirely.
Same thing with the employer mandate. I’m pretty sure it’s not just sloppy work. It’s an intent to want to “keep it handy for later just in case.”
Repeal of taxes on employee health plans
Repeal of tax on over the counter medications
Repeal of the tax increase on Personal Health Savings Accounts (from 20% down to 10%)
Repeal of the limit on Flex Spending Accounts
Repeal of the Medical Device Tax
Allows deductions (again) for the Medicare Part D subsidy on tax returns
Lowers income threshold for medical care deduction eligibility from 10% back to 7.5%
Repeal of Medicare Tax Increase (less money taken out of your paycheck for Medicare)
Refundable tax credit for insurance coverage. If you have insurance in a given year, you are given a tax credit of from $2,000 to $4,000 depending on age. This is pro-rated down to the month if you had coverage for only part of a year. The amount goes down for those making over $75,000 a year.
Increase to allowable Health Savings Accounts limits per month and deductibility
Higher “catch up” amounts allowed into HSAs for older people, which can be deposited by either spouse in a joint account.
HSAs can be used in first 60 days of coverage as “good for” the amount of a medical expense, even if the money isn’t in the account yet. It will be taken out later as money is deposited into the HSA. This only applies to the first 60 days of a new insurance policy.
This sounds like the Feds shoveling money to the States with less oversight, at least in this draft. I can’t tell whether the parts not specifically referred to here are still active from Obamacare (for example the “Insurance Marketplace.” I’m thinking it is.
As with Obamacare, there are a LOT of unanswered questions. First of all, why not just repeal the whole thing and use the free market? I see where the GOP wants to get it both ways (government health care and the free market) but this is really not “free market” per se.
Then again, it does repeal (sorta) much of the teeth of Obamacare.
I’m bothered by what isn’t outright repealed (the individual mandate for one) but “reset to zero.” However, what can you expect from the GOP?
If this is the BEST we can do… *shrugs* It’s maybe 60% as bad as Obamacare. States really can avoid most of the regulations if they WANT, and it does repeal a lot of the FEDERAL rules. So, it does make the States more responsible for things. That’s a star.
On the other hand, the funding mechanisms are as clear as mud. The only clearly spelled out funding streams are the income tax credits and the “$15 billion from the US Treasury.” That sounds like a lot of money, but that’s only about $50 a person per year.
I get the feeling that the Feds are trying to push the costs back on the states for the actual insurance subsidies. Even the $15 billion “Fund” will eventually cost states 50% of the cost to access. So, if a state wants $300,000 for an anti-smoking program, they have to pitch in $150,00 of their own money.
Medicaid will still provide most of the poor person coverage I’m betting, and I can see the $2,000 tax credit for a young person as giving some incentive to get into the market.
Of course again… if MOST of the country is getting this benefit that will add up in higher taxes SOMEWHERE. If just 200 million people each claim an average of $3,000 in tax credit that’s $600 billion in tax credits! I haven’t seen where that money is going to come from yet.
In fact, they REPEALED many of the taxes, which is by itself a good thing. However, ADDING billions in SPENDING is definitely not a good thing.
I would have to see a breakdown of how this plan works in practice. I don’t see us CUTTING hundreds of billions out of the budget anywhere, so where is that money going to come from for all those tax credits? I get it… it’s attractive through simplicity… “Here’s a few grand. Go buy insurance!” However, every “free” dollar has to come from SOMEWHERE. That’s why Obamacare has bombed… the economics make it unworkable.
Probably most importantly, I have seen NO repeal of the biggest issues with Obamacare having to do with coverage. There is no scrapping of the “Kids stay on your plan till they are 26”, nor “Must cover pre-existing conditions.” No real market reforms (cross-state insurance coverage portability for example.) No addressing tort reform and lawsuits.
I guess it’s a START as an idea to discuss. However, a FULL REPEAL and a “here’s a few thousand dollars” would do that a helluva lot easier. The best thing I can say for it is that it seems to put the power back in State hands and effectively rolls back Federal involvement, limiting it to a cash cow to dole out checks with very little input.
That’s a start…but if we really want to get the Feds out…just GET THE FEDS OUT! Turn the whole thing over to the States and let them handle it. By involving the Feds, you are still just taking money OUT of the States to give BACK to the States. It’s silly.
I already know the Democrats are going to fight this tooth and nail.
It is pro-States. They hate decentralization of power.
It has several abortion clauses. THAT won’t do.
They are also pretending to be fiscally conservative these days and will zero in on the funding issue right away. Then again, Obamacare is collapsing pretty fast and didn’t stand that test itself!