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CORRECTED-FACTBOX-Republican Obamacare plan would repeal Medicaid expansion, taxes
March 7, 2017 / 7:07 PM / 9 months ago

CORRECTED-FACTBOX-Republican Obamacare plan would repeal Medicaid expansion, taxes

(In March 7 story, corrects paragraph 4 to say that under Republican proposal, taxes on so-called Cadillac insurance plans would be delayed until 2025 instead of abolished)

By Yasmeen Abutaleb

March 7 (Reuters) - Republicans in the U.S. House of Representatives have unveiled a plan to replace Obamacare, known formally as the Affordable Care Act, stripping away much of Democratic President Barack Obama’s signature domestic policy achievement that insured 20 million Americans.

President Donald Trump and his Republicans had vowed for years to dismantle the law. It was a central campaign issue in 2016. Two House committees will next review the bill, so it could still change substantially. Here are its main provisions:

TAXES

The Republicans want to eliminate next year Obamacare’s income-based tax credits that help low-income people purchase individual insurance. These would be replaced with age-based tax credits ranging from $2,000 to $4,000 per year that would be capped at upper income levels. While Obamacare’s credits provided more assistance to those with lower incomes, those in the Republican plan would be largely based on age.

The Republican bill would abolish most Obamacare taxes, including taxes on medical devices, health insurance premiums, indoor tanning salons and prescription medications. It would also delay a tax on high-cost employer-provided insurance known as “Cadillac” plans until 2025.

Those taxes paid for Obamacare. Republicans have not said how they would pay for the parts of the law they want to keep.

The bill also repeals the Obamacare financial penalty for the 2016 tax year for not purchasing insurance, as well as a surtax on investment income earned by upper-income Americans.

And it repeals the mandate that larger employers must offer insurance to their employees.

MEDICAID

Under Obamacare, more than 30 states, including several Republican states, expanded the Medicaid government health insurance program for the poor. About half of Obamacare enrollees obtained insurance through the expansion.

The bill would allow the Medicaid expansion to continue until January 1, 2020, providing states that chose not to expand under Obamacare a window to enroll more people. After that date, the expansion would end and Medicaid funding would be capped on a per-person basis.

States that did not expand Medicaid would receive additional funds through a number of changes, including the reinstatement of disproportionate share hospital payments, money that is provided to hospitals that serve a large number of Medicaid and uninsured people.

State Medicaid plans would no longer have to cover the same essential health benefits that health insurers on Obamacare’s exchanges must provide. That fulfills a Republican promise to return more control to the states, as they can decide what their Medicaid plans must cover.

INSURANCE COVERAGE

The Republican plan would maintain some of Obamacare’s most popular provisions. It would allow young people to stay on their parents’ health plan until age 26, ban insurers from discriminating against those with pre-existing conditions and bans insurers from setting a lifetime dollar limit on coverage.

But the bill would allow insurers to mark up premiums by 30 percent for those who have a lapse in insurance coverage of about two months or more.

Insurers won another provision they had long sought: The ability to charge older Americans up to five times more than young people. Under Obamacare, they could only charge up to three times more. It would also allow states to set their own ratio.

The measure also provides states with $100 billion to create programs for patient populations, including high-risk pools to provide insurance to the sickest patients.

The bill would also revoke federal funding for Planned Parenthood for one year. (Reporting By Yasmeen Abutaleb; Editing by Kevin Drawbaugh and Jonathan Oatis)

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