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Jan
9

ACA Deathwatch – The GOP repeal bill is out

Late Friday the Republican Study Committee released its ACA Repeal Bill.

No word on a replacement plan as of this writing.

Key points

  • A tax credit of $7,500 (individuals) or $20,500 (families) which will apply to income and payroll taxes, and will be indexed for inflation at the same rate as CPI-U. The credit does NOT vary by a person’s income level, so folks making $10,000 a year get the same amount as multi-millionnaires.
  • Fund high-risk pools at $2.5 billion a year for 10 years for those people who can’t get insurance on the open market (note high risk pools have historically not worked over the long term due to state budget limits and increasing costs due to adverse selection)
  • Requirement that individuals MUST stay continuously insured to avoid pre-existing condition limits. Lots of problems with this…
  • Allow sale of insurance across state lines – an initiative that is already in place in three states – and no insurer has EVER done this because it doesn’t work.

For several reasons outlined succinctly in a piece in Health Affairs last week, repeal without replace is problematic. Best guess is the final repeal legislation will call for a replacement within 3 years.

Finally, there is still no consensus among Republicans on a strategy re replacement, much less what a replacement bill would involve.

 


3 thoughts on “ACA Deathwatch – The GOP repeal bill is out”

  1. Will the tax credit turn into cash support if one’s federal tax liability is less than $7,500? The median wage in the U.S. is about $37,000.

  2. An interesting section about allowing those 70 1/2 to move mandatory IRA distributions to an HSA (without paying tax on the distribution). That sounds nice, but could be a loss of taxes to the govt. Also, a benefit for those who receive big $$$ distribution (i.e, the wealthy). Not sure it benefits those on Obamacare who will be moving to “Republican-care”

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Joe Paduda is the principal of Health Strategy Associates

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