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Congressional push for ACA 'repeal and replace' ramping up



March 06, 2017
Area(s) of Interest: Health Care Reform 

Physician leaders and staff from the California Medical Association (CMA) were in Washington, D.C., three times last month aggressively advocating our priorities for health care reform. Bottom line? CMA is fighting to ensure that no Californian loses health insurance coverage.


The CMA leadership delegation was joined by Brad Anderson, M.D., (Bakersfield); Tom Daglish, M.D., (Visalia); and Steve Beargeon, executive director of the Tulare County Medical Society – all from key Republican leadership districts. Two California medical students also joined the CMA contingent – Karthik Sarma of UCLA and Sarah Smith of UC Irvine.


Despite enormous hurdles and disagreement within the House and Senate Republican caucuses, House Republican leaders are pushing to pass the Affordable Care Act (ACA) “repeal and replace” plan on the floor of the U.S. House of Representatives before the April recess. They plan to pass the legislation through the budget reconciliation process, which only allows provisions that have a financial impact. However, reconciliation only requires a 51-majority vote – rather than the usual 60 votes required in the Senate.


While negotiations continue on the plan’s specifics, the legislation follows the outline of House Speaker Paul Ryan’s “The Better Way” plan. The current proposal provides the following:



  • Repeals the ACA, but wouldn’t take effect until 2020 to provide a transition to the replacement plan.



  • Repeals the ACA individual mandate and its penalties, low-income subsidies and the taxes that funded the ACA, such as the medical device tax, the health plan Cadillac tax on high-end health benefits and the tax on high-income earners.



  • Repeals the essential health benefits package, which includes preventive and maternity care, but allows states to set those requirements. (CMA supported the essential health benefits package, particularly for preventive services.)



  • Drafters of the plan say they intend to maintain coverage for individuals with pre-existing conditions and children on their parent’s policies until age 26. (CMA strongly supports maintaining coverage for patients with pre-existing conditions.)



  • Insurers would be allowed to sell insurance across state lines (and not meet individual state laws). (This would obliterate California’s large body of law protecting patients and physicians, including CMA-sponsored laws, such as the requirement that insurers pay claims within 45 days.)



  • Relaxes the ACA’s community rating rules and would allow insurers to charge older individuals five times as much as younger individuals. (CMA supported the ACA’s community rating.)



  • Allow individuals to purchase insurance in the private marketplace. Advanceable/refundable tax credits would be provided to help individuals afford coverage. The amount of the credit would be based on age, rather than income. The tax credits would begin at $2,000 for 20- and 30-year-olds and graduate up to $500 per decade to $4,000 for 60- to 64-year-olds. (CMA is concerned that under this plan insurance may not be affordable for low- to moderate-income people.)



  • As an alternative to the individual mandate penalties, it institutes penalties for anyone who seeks to sign up for insurance if they have not maintained “continuous coverage.” It would penalize individuals who let their coverage lapse for more than one year with a 30 percent increase in premiums for one year. (CMA is concerned that this could preclude some individuals from affording insurance. We’re waiting for the Congressional Budget Office analysis of the impact.)



  • Loosens restrictions on health savings accounts (HSAs) paired with high-deductible health plans, and expands the use of HSAs to pay for over-the-counter medications. (CMA supports HSAs.)



  • Provides $100 billion for the next 10 years for “state innovation” grants. These funds can be used in a variety of ways to establish state high-risk pools or reinsurance programs, provide assistance with out-of-pocket expenses, or provide dental and vision benefits. (CMA agrees that reinsurance funding is important.)



  • Grandfathers the Medicaid expansion for those states that expanded Medicaid coverage for adults up to 138 percent of the federal poverty level. However, if such adults go off Medicaid and reenroll, the state would no longer receive the enhanced 90 percent federal match. If the state wishes to cover new adult Medicaid enrollees, the state would only receive a 50 percent federal match. Hospitals in states that didn’t expand Medicaid would see the ACA disproportionate share hospital payment cuts restored. (CMA is fighting to maintain the Medicaid expansion, and we’re concerned about the low physician reimbursement rates and the resulting lack of access to physicians. CMA is pushing a proposal that would provide an increased federal match for physicians who provide care to Medi-Cal patients in counties where more than 35 percent of the population are enrolled in Medi-Cal. The National Governor’s Association just released a new proposal that would allow all states to expand Medicaid in the future with the enhanced match as long as other flexibilities were provided to allow states to require Medicaid beneficiaries to work, among other things.)



  • Eliminates the Medicaid entitlement for children, pregnant women, the disabled and elderly. Establishes a per capita cap funding system that provides each state an allotment per Medicaid beneficiary based on 2016 funding levels. An annual medical inflator would be established to keep funding current with rising costs. It’s unclear whether there would be an across-the-board cut to Medicaid before the per capita cap program starts – previous drafts showed a 25 percent cut. (CMA has concerns with eliminating the Medicaid guarantee for our most vulnerable patients. CMA also has policy opposing per capita caps, but we are working to improve the proposal. We are opposing the across-the-board cut and urging a large medical inflation adjustment. We are also asking that prescription drugs be excluded from the cap, as those rapidly rising costs could consume the entire budget. Again, CMA is advocating for increased funding for physician Medicaid payment rates to increase access to care in underserved regions. And finally, CMA is asking Congress to urge California Governor Jerry Brown to restore the Proposition 56 tobacco tax funds intended to increase Medi-Cal physician payment rates to improve access for patients.)



  • The major funding source of the legislation is a proposal to cap the tax exclusion for individuals with employer-sponsored insurance. It caps the tax break at 90 percent of current premiums, which is opposed by both organized labor and the U.S. Chamber of Commerce.



  • Defunds Planned Parenthood for one year. (CMA opposes the defunding of Planned Parenthood.)


As currently drafted, this plan won’t pass the U.S. House or the Senate. The House Freedom Caucus (formerly the Tea Party Caucus) has said it will accept nothing less than the full repeal legislation the House passed last year. And, at least three Republican Senators have said they would oppose the current proposal because the tax credits are akin to a new entitlement program.


On the other end of the Republican spectrum, at least four Senators have expressed opposition to eliminating the Medicaid expansion. The Republican members from Medicaid expansion states and the Republican Governors are heavily weighing in on the Medicaid provisions.


The Central Valley has some of the highest concentrations of Medicaid and Covered California patients in the nation. These communities are concerned about the loss of coverage and Medicaid funding for their residents. Despite these disagreements, the leadership is working to pass bills out of the relevant committees in the next few weeks and to the House floor by the April recess.


The CMA delegation also met with leaders of the Centers for Medicare and Medicaid Services to urge them to continue to reduce regulatory burdens under the quality, cost and electronic health record (EHR) reporting programs established under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Specifically, CMA urged the following:



  • Hold EHR vendors more accountable for compliance and interoperability.

  • Eliminate unrealistic Meaningful Use Stage 3 measures that were maintained under MACRA.

  • Provide additional exemptions and accommodations for small and rural practices and exempt physicians within five years of retirement from penalties.

  • Make scoring adjustments for Medicare-Medicaid dual eligible patients, so physicians are not disincentivized from treating such complex, costly and vulnerable patients.

  • Allow large physician groups that provide care across many counties to receive geographic payments based on the site of service to more accurately cover local costs to provide care.

  • Promote primary care medical home models across California.


CMA urges all physicians to continue to meet with their Members of Congress, and talk to them about our core health reform priorities, which are to:





  1. Improve access to physicians

  2. Protect state and federal Medicaid funding

  3. Ensure Californians do not lose coverage

  4. Provide affordable coverage, particularly for low- and moderate-income families

  5. Eliminate administrative and regulatory burdens in the Medicaid and Medicare programs

  6. Provide a choice of insurers, HSAs and physicians.

  7. Maintain reforms on the insurance industry – coverage for pre-existing conditions, 85 percent medical loss ratio and no annual/lifetime limits on benefits

  8. Stabilize the individual insurance market

  9. Provide access to affordable prescription drugs




Members who feel passionately about CMA’s health reform priorities should email communications@cmadocs.org. Our communications department can help publish op-eds in your local newspapers and secure media interviews in your market. It’s critically important that policymakers hear from physicians through earned media and in-person meetings.

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