House Republicans have revealed their long-anticipated Affordable Care Act repeal and replace bill — the American Health Care Act.
The bill repeals numerous ACA related taxes and penalties (mostly starting in 2018), defunds Medicaid expansion after 2019 and offers tax credits ($2,000–4,000 based on age and income) for the individual market.
Further, the tax credits will only be made available in full for those earning under $75,000 ($150,000 joint filers).
The Good, The Bad
“The bill hits the Medicaid market hard. It would end the Medicaid expansion in 2020 and also sets the new Medicaid per capita allotment growth rate at CPI Medical,” Credit Suisse analyst Scott Fidel wrote in a note.
On the other hand, Fidel noted that MA plans would particularly benefit from the repeal of the health insurance industry fee and there are several proposals in the House bill that could support a more balanced individual market risk pool.
Tough Political Battle On The Cards
However, the House bill may face a tough political battle even with President Trump's support as four Republican senators expressed concern around House proposals.
Andrew Parmentier of Height Securities expects the dissent to delay the passage of the new healthcare act as the debate itself is expected to extend beyond May.
“The continued divide within the Republican party indicates to us that the aggressive timeline set out by Republican leadership — who wish to see health care finalized in the House by the end of March, and in the Senate by mid-April — is highly unlikely. Instead, we expect the debate will bleed into May and possibly beyond,” Parmentier wrote in a note.
Parmentier also noted that the proposed bill is a trimmed down version of Obamacare and “there is no overriding political philosophy or economic-driven blueprint to the Republicans’ replace part of the equation.”
“Add expanded health savings accounts and a new refundable tax credit to the mix and you have something other than Obamacare [...] it just doesn’t feel like a repeal,” Parmentier highlighted.
Related Link: Affordable Care Act Replacement Bill Leaked
Related Link: Companies That Have The Most To Lose If Obamacare Is Repealed
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