After an embarrassing failure in March, President Donald Trump is pushing fellow Republicans in the U.S. Congress to try again to replace his predecessor’s health-care reform, the Affordable Care Act (ACA), or Obamacare. Their bill, the American Health Care Act, was pulled after Republican leaders failed to gain enough support because conservative and moderate factions couldn’t agree. Hopes for passage now rest on an amendment that would give states flexibility to loosen ACA regulations -- and on a last-minute addition of $8 billion to help people with pre-existing health conditions. It’s unclear if the changes will win enough backing. Adding to the urgency, insurers continue to scale back their participation in Obamacare, worried about financial losses.
1. What’s changed in the Republican alternative?
Republican representatives Mark Meadows, leader of the conservative House Freedom Caucus, and Tom MacArthur, a leader in the moderate Tuesday Group, negotiated an amendment that has at least brought the conservatives on board. It lets individual states decide for themselves whether to keep certain consumer protections in Obamacare, or drop them to save money. In a bid for more support from moderates, Representative Fred Upton, a Michigan Republican, proposed offering $8 billion over five years to help people with pre-existing conditions pay health insurance premiums.
2. What pieces of Obamacare could states drop?
Under the revised Republican plan, states could let insurers charge older customers more than the original bill allowed -- at least five times more than younger ones, beginning in 2018. (Under Obamacare, insurers can charge older customers no more than three times as much.) Starting in 2020, states would also be able to draw up their own list of essential health benefits that insurers must cover, perhaps trimming the 10 categories mandated by Obamacare, which include preventive care, mental health treatment and prescription drugs. Also, states could allow insurers to charge higher premiums for people with pre-existing conditions who have had a gap in coverage of at least 63 days in the prior year. To do so, states would have to establish some method (a special “high-risk” insurance pool, or subsidies) to help sick people. Obamacare prohibits insurers from charging more to cover people with pre-existing conditions.
3. Didn’t Trump vow to keep covering pre-existing conditions?
He promised, in his March 1 address to Congress, to “ensure that Americans with pre-existing conditions have access to coverage.” MacArthur argues his amendment does that, by continuing to prohibit insurers from denying coverage to sick people. But this guarantee of access to insurance doesn’t necessarily mean it will remain affordable. Trump, in a May 1 interview, raised the bar still higher for Republicans, saying the “final form" of their plan “will be every bit as good on pre-existing conditions as Obamacare.”
4. How easy would it be for states to trim health care coverage?
They would have to show that their proposals would either: reduce average premiums, increase enrollment, stabilize the market, stabilize premiums for people with pre-existing conditions, or increase the choice of health plans. States would apply to the federal government for waivers, which could last for up to 10 years and would take effect automatically unless the Department of Health and Human Services had a reason for denial within 60 days.
5. Will states want to reduce coverage requirements?
The individual insurance market is in trouble in some states, such as Tennessee, where some areas will have no insurers offering plans in 2018. Those states will be most likely to apply for waivers first, says Kim Monk, an analyst with Capital Alpha Partners in Washington.
6. Who’s against this plan?
Groups representing doctors, hospitals and seniors opposed the initial bill and are against the changes as well. The American Medical Association said it “could effectively make coverage completely unaffordable to people with pre-existing conditions.” AARP and the American Hospital Association said the amendment is worse than the original.
7. What’s the outlook in Congress?
In the House, which has first crack, it’s unclear whether the proposed changes gain enough support of moderate Republicans. Once again, no Democrats are expected to support the bill, meaning that Republicans can afford only 22 defections among their 238 members. Should the bill pass the House -- a prospect that could be within reach -- the Senate will likely make changes to increase financial help for older, low-income people.
The Reference Shelf
- QuickTake Q&As on the challenge of repealing Obamacare, how Obamacare dodged the first bullet, and the power of the House Freedom Caucus.
- A QuickTake explainer on Obamacare.
- Former President Barack Obama’s defense of Obamacare.
- A summary of the MacArthur amendment.
- The text of the American Health Care Act.
- A graphic on insurers fleeing Obamacare markets.
- Trial-and-error is not a good health-care legislative strategy, writes Bloomberg View’s Megan McArdle.