While there is no bill, we now have a summary of the latest plan for repealing the Affordable Care Act (you can read it here). It isn’t clear what the future is for this document. There are still members of Congress who believe voters want them to repeal the Affordable Care Act (ACA), even after the public outcry their efforts inspired last year. And House Republicans released a budget blueprint this afternoon that includes enormous cuts to Medicare and Medicaid and echoes some of the arguments made in this latest plan. So there’s some chance that this will turn into a more serious threat.
The Health Policy Consensus Group, which drafted the outline, is a group of experts who work for free market think-tanks such as the Heritage Foundation and the American Enterprise Institute. So it’s no surprise that their solution to high health care costs is to eliminate regulations that protect consumers. The group wants to eliminate the protection for pre-existing conditions, which they refer to as the single risk pool. They would also eliminate the essential health benefits provision, which require insurers to cover a minimum set of medical services such as prescriptions, preventive services like cancer screenings, hospitalizations, and maternity care.
It is true that insurers could charge less for plans if they weren’t required to cover anything in those plans and if they could refuse to include people who had received medical care in the past. But this is exactly what consumers struggled with so much before the ACA. These protections are critical elements of the ACA and they are widely supported by consumers. Skimpy plans are a good way for insurance companies to make a lot of money without paying for anyone’s medical care. They aren’t a good way for people to secure themselves financially against health problems and financial disaster.
Like previous repeal plans, this one eliminates federal funding for Medicaid, premium subsidies, and cost-sharing reductions in favor of a block grant. Under a block grant, the federal government would distribute one sum to states instead of splitting the actual program costs with states, as it does now. For example, if 100,000 New Yorkers qualify for premium subsidies, that’s what the federal government funds. Within the Medicaid program, New York splits the actual costs of care with the federal government. The block grant would be based on a formula, not actual costs. The formula would be designed to drastically reduce how much money states like New York receive since we’re a large state that gets an above average amount under the current system. The plan would then force New York to split that smaller amount evenly between Medicaid and spending that helps people buy private insurance.
It isn’t clear from the document whether the block grants would replace all federal Medicaid spending or just new spending on Medicaid since the ACA. Even if the block grant only applied to new spending, New York would have a much smaller pot of money to meet a broader set of goals: everyone added to Medicaid since the ACA (such as childless adults), assistance to everyone currently receiving premium subsidies, and some sort of program to cover people with pre-existing conditions who would no longer be able to purchase their own insurance. New Yorkers will have to decide how to distribute those extremely limited resources between people in nursing homes, people with serious disabilities, children, and everyone else. It is unlikely that New York will be able to preserve the benefits the ACA provides to higher-income working adults in that environment.