Obamacare repeal and replace Republican outline – reason for optimism but more questions than answers

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On Thursday, February 16, 2017, The House of Representative’s Republican leadership gave all House Republican members a 19 page draft document (“Policy Brief and Resources”) which outlines the party’s ideas to replace The Affordable Care Act (Obamacare).   Armed with this document, members of Congress will now return to their districts for their February 17-27 recess.

Why Congress needs or warrants a vacation now escapes my view.  Certainly, members of Congress need time to speak with their constituents, but in the age of the internet and social media, do they really have to shut down Congress for 10 days to do that?  But, I digress.

Speaker of the House Paul Ryan suggests a repeal and replace bill could be submitted after Presidents Day (February 20, 2017) and President Trump suggested such a bill could be forthcoming in early March.

Doesn’t seem likely to me that a comprehensive bill will be forthcoming so soon.  The 19 page document noted above is a 19 page document – short on specifics and void of any Congressional budget scoring.  But, who knows – political pressures could rush something forward; after all, such was the case with the Affordable Care Act.

What we have in front of us, then, is the aforementioned 19 page document. There are five main themes in this document.

1. Implementation of universal healthcare tax credits. Tax credits (not tax deductions) available to any one purchasing healthcare insurance on their own and not entitled to other healthcare coverage.  The amount of credit is age related (higher for higher ages), NOT income related, is portable, available to dependent children up to age 26, and grows over time.  Oh – and the credit is refundable, meaning the credit can exceed one’s tax and one would receive a net cash check from the government at tax time.  WOW! Quite the bounty for everyone, though the devil will be in the details, meaning how much is the credit?
2. Expansion of Health Savings Accounts (HSAs). The government will expand access to HSA-eligible healthcare plans (likely it seems related to high deductible healthcare plans) and increase the amount citizens can add to their HSA accounts.  HSA contributions are pre-tax, so this is a great benefit as long as you’ve got enough income to be paying taxes.
3. Repeal the Medicaid expansion under Obamacare. Well not really.  The document talks about repealing the Medicaid expansion under Obamacare, but also talks about a phase out repeal to take effect at some year to be determined.  Healthcare coverage for those now under Obamacare’s  Medicaid extension would still be funded under the new plan, but in a way that provides more flexibility to states and in an undetermined amount.
4. Introducing state innovation grants – pools of money, of unknown amount, given to the states to serve as a further safety net for those of least means.
5. Allow individuals and families to purchase insurance across state lines. A nice benefit for those folks in high premium states – see our blog of January 4, 2017 entitled, “Obamacare repeal and replace coming – You may be better off in a red state”.

My basic takes relative to this document:

1. If politics forces an Obamacare repeal and replace bill out as early as March, the bill is likely to be short on specifics.
2. The replace outline strikes me as possibly good for everyone but likely best for those older citizens with greater means – it all depends on the levels of tax credit proposed, the nature of benefits under Medicaid revisions, and what happens to premiums once individuals are allowed to purchase insurance across state borders.
3. All in all, then, I think there’s reason for optimism, but I also suspect the replacement bill will usher in more questions than answers.