UPDATE on Health Care Reform: The 3 Tracks to Repeal and Replace Obamacare
By SBE Council at 19 March, 2017, 10:19 pm
By Karen Kerrigan-
Legislative efforts to repeal and replace Obamacare are moving concurrently on three distinct tracks. The GOP House leadership has described these as “phases,” but the effort is actually a synchronized approach where significant movement is occurring in each of the three tracks.
Track One in Motion – American Health Care Act
The American Health Care Act (AHCA) addresses the tax and budgetary pieces of Obamacare. It is moving through a legislative tool called reconciliation. The House Ways and Means Committee, Energy and Commerce Committee, and Budget Committee have passed the legislation. A full House vote on AHCA may occur during the week of March 20.
AHCA repeals the individual and employer mandates, and almost all of Obamacare’s tax increases. The legislation improves health savings accounts (HSAs), restores the pre-Obamacare contribution limits to flexible savings accounts (FSAs), and will implement refundable and advanceable tax credits while changing Medicaid to a system that incentivizes the states to provide help to people who truly need coverage.
What’s in the AHCA? SBE Council chief economist Ray Keating reviewed some of the key plusses for small businesses (as well as a highly questionable CBO scoring) in a recent Small Business Insider Blog post here.
SBE Council Advisory Council member Barbara Weltman also reviewed the ACHA and its tax and budget provisions, and this analysis can be accessed here.
Track Two in Motion and Ongoing – HHS Review and Action
Health and Human Services (HHS) Secretary Tom Price continues to review possible administrative changes to Obamacare with the goal of reducing costs and fixing various pieces that have dislocated the marketplace. In many states, the individual and small group market is a mess. Within the boundaries of what is allowed by law, HHS has already taken steps and is looking to take additional steps to stabilize these critical markets for small businesses and the self-employed.
On February 17, the HHS announced that it would provide more time and flexibility for insurance companies to make decisions about coverage plans for 2018. On February 15, a proposal was announced that would give insurance companies more flexibility to design plans with different financial structures with the goal of reducing premium costs.
Also, in a February 23 media release, the HHS announced that it would extend a provision (set to expire this year) to allow people with noncompliant plans (under Obamacare) in the individual and small group markets to renew those plans. This announcement will provide certainty to some members of small business and self-employed community (and their employees). Unfortunately, many insurance companies began altering plans as Obamacare was being implemented, which means many small businesses and the self-employed lost the plans they liked and could afford. Choices and options have been reduced. The above-mentioned administrative actions, combined with legislation, are meant to change Obamacare limitations that have driven costs higher.
The HHS review process is ongoing, and any new “repeal and replace” legislation that passes the Congress and signed by President Trump will likely spur additional review and action.
Track Three in Motion and Ongoing – Complimentary Legislation to Foster Competition and Affordability
This track includes related pieces of legislation that are needed to help clear a path and foundation for a competitive marketplace to promote more choices, lower costs and innovative solutions for health care and coverage. As a start, four pieces of legislation (below) will be voted on by the House beginning the week of March 20:
The Competitive Health Insurance Reform Act (H.R. 372): Eliminates anti-trust protection for insurance providers and creates competition so Americans are not left with one or two choices for health coverage – which is a major problem for many self-employed people and small businesses throughout the country. See SBE Council’s support letter here.
The Small Business Health Fairness Act (H.R. 1101): This legislation would allow small businesses to pool together and purchase plans – increasing their purchasing power to negotiate better care and lower premiums for their workers. This is an important step toward purchasing healthcare across state lines as it allows interstate shopping for small business plans. See the small business coalition letter (signed by SBE Council) in support of H.R. 1101 here.
The Protecting Access to Care Act (H.R. 1215): This legislation is designed to prevent abusive lawsuits that drive health premium costs higher, which result from the added costs of defensive medicine. See House Judiciary Chairman Bob Goodlatte’s (R-VA.) statement about the need for this legislation here. SBE Council strongly supports H.R. 1215.
The Self-Insurance Protection Act (H.R. 1304): This bill would protects workers who get their health care coverage from employers that self-insure, by providing a backstop on catastrophic losses. The legislation clarifies once and for all that stop-loss insurance is not health insurance and prevents future bureaucratic overreach through excessive regulation. Read more about the bill in a statement by Rep. David Roe (R-TN) in a statement here. SBE Council strongly supports H.R. 1304.
Momentum on the Three Parallel Tracks
President Trump and Vice President Pence have been meeting with various groups within the House GOP to hammer out a path forward so that legislation moves to the Senate. Republicans in the Senate (as well as Democrats) will have major input on the legislation that was sent to them by the U.S. House. I believe several legislative pieces will make their way to President Trump’s desk for his signature.
In the meantime, small business owners and entrepreneurs can always weigh in on this critical issue by calling their U.S. House members at 202-224-3121 to express your opinions about these bills. SBE Council is engaging with the Administration and key leaders on Capitol Hill to ensure that reform efforts produce the outcome desired by entrepreneurs and small business owners – significantly lower costs, access to care, and innovative choices in health coverage.
Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council