Senators Bill Cassidy, R-Louisiana, and Susan Collins, R-Maine unveiled their proposal this week for the initial replacement of the Affordable Care Act. The outline stirred up quite a bit of controversy as critics, such as Senator Chuck Schumer of New York thought it was an “empty facade” and proponents of an Obamacare repeal thought it was not enough.
Its roots date back to 2015 when then freshman Senator Cassidy drafted a bill that allowed states to opt out of the individual and employer mandates, incentivize coverage, and offer catastrophic medical coverage plans for the uninsured.
Now in 2017, Senator Bill Cassidy, a physician, and cosponsor, Senator Susan Collins, having a long career in politics, proposed a partial replacement of Obamacare, giving more power to the states. The final language could look very different once Congress debates. This is what they proposed.
States can choose from three options:
In the Cassidy-Collins proposal, states would have three options summarized here:
If states wish to continue to operate their health care system under the Affordable Care Act they can. Federal subsidies, mandates, state run exchanges and medicaid expansion funding would not change. Dr. and Senator Cassidy stated, “California and New York, you love Obamacare, you can keep it.”
HSA funding option
If a state wishes not to continue operating its healthcare system under the ACA, then the majority of the funding promised by the Obama administration to fund subsidies and Medicaid expansion can be used instead by the state to create tax-free Health Savings Accounts for residents with low income. In this new “market-based” system, the HSA’s can be used to purchase the insurance and costs of medical care transferring more power to the consumer.
Creating their own system with no federal assistance
States could opt to reject any federal funding for their health care programs and design their own system.
States would choose their option by 2018, work to implement it in 2019 and their system would be up and running by 2020.
Popular ACA provisions that would remain intact include:
Prohibiting insurers from denying coverage due to pre-existing conditions
Children able to stay on parent’s coverage up to age 26
Prohibiting lifetime limits
Additionally, premiums for elderly individuals cannot be more than 3 times that of younger people.
Again, this bill could have a long road ahead in the House and Senate, but highlights the difficulty of replacing the ACA, which created the “Obamacare” healthcare system. Like cutting the wrong wire when defusing a bomb, the ACA will self destruct, causing millions of Americans to lose their federal subsidizes if any repeal is attempted. Either path the GOP chooses may be unpopular as there is no national consensus on how to deal with rising health care costs, premiums, medications, and lack of employer enthusiasm in purchasing employee insurance. Although initial actions by the Trump administration or states to end mandates and penalties could be enacted quickly and prove popular, actual replacement of our healthcare system may take years.
The fact sheet for the PFA 2017 can be viewed here: