Analyses outline challenges of replacing the ACA

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Republicans in Congress have been clear that they plan to repeal the Affordable Care Act next year.

Though Republicans have been clear that they plan to repeal the Affordable Care Act, two new analyses drive home just how challenging it will be to replace the healthcare reform law.

One analysis, from The Brookings Institution, examines the possible consequences of Republicans repealing the ACA using the budget reconciliation process modeled on similar legislation that President Barack Obama vetoed last year.

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Over the course of 10 years, that legislation would eliminate $680 billion of taxes on high-income households and the healthcare industry, including insurers, device manufacturers and drug companies. Such cuts would accelerate the exhaustion of Medicare’s trust fund by four years, write the Center for Health Policy’s Loren Adler and Paul Ginsburg.

And because that tax revenue would no longer be available to finance a plan to replace the ACA’s coverage expansions, it would make it that much harder for policymakers to design a replacement plan that is both sustainable and doesn’t increase deficits, they argue.

It will also be difficult to determine the number of people who are “covered” in the individual market if the ACA’s current system of tax-based subsidies is replaced with a differently structured system of refundable tax credits, analysts Susan Yeh Beyer and Jared Lane Maeda explain in a blog post from the Congressional Budget Office (CBO).

Such proposals would likely eliminate any clear definition of what type of insurance product people could use their tax credits to purchase, leading insurers to offer some options that have much skimpier benefits than is currently required, they write.

But the CBO only counts those with a comprehensive major medical policy as having private insurance. Thus, such a replacement scenario would require the CBO and the Joint Committee on Taxation to separately estimate the number of people who would receive the tax credits and the number of people who would purchase individual market insurance that meets a broad definition of coverage.