House GOP Changes to Healthcare Bill Would Allow Work Requirements, Block Grants

The changes were designed to appease the most conservative House Republicans, whose votes are needed because no Democrats will support the bill. A House floor vote could come by Thursday.

House Republicans on Monday made several changes to the American Health Care Act (AHCA), the proposed replacement for the Affordable Care Act (ACA) that is heading for the House floor as early as Thursday.

The Congressional Budget Office (CBO) has estimated that the version it evaluated would cause 24 million Americans to lose health coverage by 2026, including 14 million the first year. There are no plans to send the updated version to CBO for a new score, despite even more far-reaching changes to Medicare and Medicaid. The CBO found that the AHCA would cut Medicaid funding $880 billion over 10 years.

Amendments released Monday would do the following:

  • Allow states to impose work requirements on able-bodies, childless adults in Medicaid. 
  • If states wish to enroll in Medicaid expansion before the window closes December 31, 2019, they must include the work requirement or they will not receive the 90% match for those up to 138% of the poverty line.
  • Give states the option to receive Medicaid funds in a pure “block grant” that does not grow with enrollment, instead of a per-capita cap that would rise or fall. The per-capita protects states during lean economic times, when more people seek benefits.
  • Changing Medicaid reimbursement rates for the elderly and disabled.
  • Speeding up by a year the end of taxes that funded the ACA, and barring new states from joining Medicaid expansion.
  • In a major shift from the original bill’s promotion of health savings accounts (HSAs), this version does not allow people at lower incomes to roll unused healthcare tax credits into HSAs. Apparently, this move was designed to appease anti-abortion groups, who fear transfers to HSAs could end-run the AHCA’s bar on tax credits funding any plan that pays for abortion.

These changes were made to secure the votes of more conservative House Republicans, who balked at the earlier version. With no Democrats supporting the bill, House leaders under Speaker Paul Ryan, R-Wisconsin, will be courting individual Republicans over the next few days.

While Ryan and President Donald J. Trump are firmly behind the plan, the bill has already lost votes from several moderate House Republicans and faces an uphill climb in the Senate.

In a series of tweets, former CMS Acting Administrator Andy Slavitt argued that the bill should be rescored, since “The life of Medicare is cut by 3 years, putting it in crisis.”

A report from the Kaiser Family Foundation found the loss of $117 billion through 2026, due to elimination of a tax on high earners, would deplete the trust fund of Medicare Part A by 2025, instead of 2028, moving it inside a 10-year window.

Slavitt asked why it was necessary to go so far with Medicaid and Medicare to repeal the ACA. “The fact that changes of this magnitude, which sever 2 pillars of our society would be buried in a bogus rescue bill should bother you,” he wrote late Monday.

Why do you need to slash Medicare & Medicaid to "fix" the ACA-- you're asking? Without time for analysis if this effects generations? 6

– Andy Slavitt (@ASlavitt) March 20, 2017

Besides the effect on the Medicare trust fund, AARP, which represents Americans age 50 and older, has vowed to make any vote on the AHCA an “accountability vote,” due to what it calls the “age tax.”

“AARP recognizes the magnitude of the upcoming vote on this harmful legislation that creates an age tax, cuts the life of Medicare and gives sweetheart deals to big drug and insurance companies while doing nothing to lower the cost of health care or prescriptions,” AARP Executive Vice President Nancy LeaMond said. “We intend on letting all 38 million of our members know exactly how their representatives voted.”

Changes to the age rating and the shift from income-based subsidies to age-based tax credits will dramatically alter premiums for those ages 50 to 64 in the individual market, highlighted by the CBO example of a 64-year-old earning $26,500 a year whose costs would rise from $1700 to $14,600 a year. Reports Tuesday said House Republicans were proposing a change that would instruct the Senate to create special tax credits for this age group when it takes up the bill.

AARP and other groups also fear how the House Republican bill would affect an estimated 17 million low-income seniors who rely on Medicaid for long-term care. Under a block grant system especially, states will have incentives to keep those with high, long-term costs off the rolls.