House Republicans release proposal to replace ACA
Yesterday, the House Republican leaders released a proposal to repeal and replace the Affordable Care Act (ACA). The proposal outlines broad policy changes but lacks enough detail to for us to fully understand how Washington State’s patients, hospitals and health systems will be affected. However, the significant reductions in federal Medicaid funds would have a major impact on our state and erode the coverage gains achieved under the ACA.
We acknowledge that the ACA isn’t perfect, but the coverage numbers are undeniable and show it’s working, at least in our state. More than 700,000 people in our state have benefited, and it has helped them lead healthier lives. Republican leaders promise a more complete proposal in the weeks ahead. We will continue to evaluate the proposal and details that emerge.
With President’s Day congressional recess next week, we know many of you are meeting with your member of Congress. Please read our summary of the proposal and review our latest talking points. Even if you are not meeting with your congressional member, please write or call their health legislative assistant to convey your position on preserving the health coverage expansions for more than 700,000 people in Washington State. Please let us know the results of your meetings and contacts with the congressional members.
Timing is everything
The House Republican leadership proposal released Thursday is the most detailed indication to date of how the leadership would replace the ACA. Republican leaders promise to release even more details after the upcoming congressional recess. Meanwhile, the schedule for action on repeal and replace continues to slip. Lawmakers now hope to have a bill through the House by Easter.
The House Republican proposal
The proposal outlines the following major policy changes:
- Repeals federal funding of Medicaid expansion, but delays this change by an unspecified amount of time. Moving forward, states would receive the traditional matching rate for the program. This cut alone would cost Washington State’s Medicaid budget more than $1.2 billion a year. For Washington State, this would reduce the Medicaid federal matching payments to our state from about 90 percent of the cost of services to 50 percent;
- Although it restores Disproportionate Share Hospital (DSH) Medicaid payment cuts, it does not reverse the Medicare cuts contained in the ACA, leaving Washington hospitals with about $4 billion in cuts over the next decade;
- Eliminates the individual and employer mandates;
- Establishes unspecified monthly advanced tax credits to subsidize individual insurance for people not eligible for employer-based or government-sponsored coverage; and
- Allows more flexibility in the design of individual insurance plans. For example, it allows subsidies to apply to catastrophic insurance coverage, increases the amounts that can be contributed to health savings accounts and re-establishes high-risk insurance pools for patients with complex conditions.
WSHA’s analysis of the House Republican proposal
This proposal raises opportunities for thoughtful dialogue, but also raises serious questions. We will to continue to evaluate this proposal as more details are released. The analysis below assesses the House proposal through our WSHA board-endorsed principles:
Principle: Our top priority is preserving coverage and maintaining access to care.
- Absent alternative funding or coverage options, the proposed cut to Medicaid expansion funding would result in hundreds of thousands of Washingtonians losing access to health coverage, or force dramatic cuts to the state budget. This cut would result in more than $1.2 billion less in funding per year for Medicaid.
Principle: Medicaid block grant proposals should recognize the state’s current structure and spending levels.
- The proposal caps federal spending to Medicaid through a block grant or per-capita-cap program. If that is the case in this proposal, it could shift unsustainable costs onto the state and providers — a shift we could not support.
Principle: Ensure stability for the health insurance marketplace for individuals and the delivery system.
- Hospitals agreed to payment cuts to fund the coverage expansions in the ACA. These cuts were calibrated on a certain number of people receiving health coverage. While the proposal restores Medicaid DSH cuts, the Medicare cuts were not restored. This change leaves Washington hospitals with about $4 billion in cuts over the next decade.
- While advanced premium tax credits for purchasing insurance coverage hold promise, the amount of the credit and other details are critical, especially for low-income populations. If the credit is not sufficient, lower-income people will not purchase coverage.
- Eliminating the individual mandate may lead to market instability, especially if the tax credits are not robust enough to incentivize the purchasing of coverage.
- Finally, the timing and sequencing of the proposed changes raise concerns. Elimination of the individual mandate and market stabilization funding in the near term without a suitable replacement will result in market turmoil, possibly leading to continued reductions in insurer service areas, particularly in underserved rural areas. We continue to advocate strongly for replacement to be simultaneous with repeal, including an allowance for the health care sector to prepare for full implementation.
Key players of Washington’s congressional delegation
While every member of the delegation plays an important role in this debate, we have several senators and representatives serving on key committees. Sen. Patty Murray is the senior Democrat on the Health, Education, and Pension Labor Committee, which has jurisdiction over parts of the ACA. Sen. Maria Cantwell serves on the Finance Committee, which has jurisdiction over Medicare and Medicaid.
Rep. Cathy McMorris Rodgers serves on the Energy and Commerce Committee, which will play a critical role in changes to the Medicaid program. Reps. David Reichert and Suzan DelBene serve on the Ways and Means Committee, which has jurisdiction over Medicare Part A and tax policy.
Resources for hospitals and health systems
In addition to the talking points, we are including new tools designed to support community-based conversations. We will be adjusting these materials in response to the House proposal.
- Preserve Coverage Talking Points: Talking points for meeting with your member of Congress. Please let us know the results of your meeting.
- PowerPoint slides for members: These are customizable slides with some basic information to help hospital leaders discuss the possible ACA repeal with their boards or other members of the community.
- Template board meeting agenda: Because a large reduction in the number of insured residents could have significant impact on hospitals, WSHA developed a template of a board meeting agenda to begin the conversation.
- Template community meeting agenda: Because a repeal would have a serious impact on the health of the community, WSHA developed a template of a community meeting agenda. Additional guidance can be found in our Community Engagement Toolkit.
Last but definitely not least…
WSHA staff is happy to present or attend your community, board or hospital leadership meeting. Please contact WSHA Policy Director Chelene Whiteaker at email@example.com or (206) 216-2545 to make arrangements.