Leaked ACA replacement draft would bring major changes to Medicaid, individual exchanges

Document titled "Patient Protection and Affordable Care Act"
A draft ACA replacement bill would reinstate high-risk pools and give consumers age-based tax credits to purchase coverage. (Getty/designer491)

A newly leaked Affordable Care Act repeal bill would gut many of the law’s individual market reforms, significantly change how Medicaid is funded and limit tax breaks on employer-based health plans.

The draft House bill, obtained by Politico, could change as it moves through committees and when it is evaluated by the Congressional Budget Office. However, its contents offer a substantive look at how the GOP plans to rework healthcare policy.

Here are some of the main ACA provisions it would repeal:

  • Cost-sharing subsidies
  • The essential health benefits requirement
  • Medicaid expansion
  • The individual mandate
  • All of the law’s taxes

Instead, it would:

  • Provide states with $100 billion in “state innovation grants” to create high-risk pools for people with preexisting conditions
  • Give consumers age-based tax credits to purchase individual market plans
  • Cap the tax exemption for employer-sponsored insurance at the 90th percentile of current premiums
  • Require individuals who fail to maintain continuous coverage to pay a 30% boost in premiums for a year when they reenroll
  • Change the rate-banding rule to let insurers to charge older customers up to five times as much as young ones, rather than just three times as much
  • Employ a Medicaid per capita cap, in which the federal government sets a limit on how much to reimburse states per enrollee.

The bill’s provisions hew closely to an outline of policy proposals recently released by Republican leaders in the House. Some insurers, however, have expressed concern with those proposals, noting that they may not be enough to stabilize the individual marketplaces.

The Trump administration has taken some initial steps to ease insurers’ concerns, including introducing a draft rule that would make changes like shortening the open enrollment period for marketplace coverage. This week, federal health officials also announced that states can allow insurers to continue offering “transitional,” non-ACA-compliant plans for another year.