The first week of February was an eventful one on Capitol Hill. First, on February 3, 2015, the House of Representatives passed HR 596, its 56th attempt to repeal the Affordable Care Act (ACA). Two days later, a news release from the Senate Committee on Finance announced that Republican Senators Richard Burr (NC), Orrin Hatch (Utah), and Fred Upton (Mich) unveiled the Patient Choice, Affordability, Responsibility, and Empowerment (CARE) Act, described as a “legislative plan that repeals Obamacare and replaces it with common-sense, patient-focused reforms that reduce health care costs and increase access to affordable, high-quality care.”
The Patient CARE Act (PCA) is described in the announcement as an instrument capable of lowering health care costs and of increasing access to affordable, quality care without Washington mandates, and a Republican blueprint for an “Obamacare Replacement Plan.” I’d like to take a look at how the PCA compares with the ACA, explore the PCA’s origins, and discuss the prospects for its implementation.
The ACA vs the PCA
Some provisions of the ACA have been retained by the PCA. These include the accommodation of adult children (younger than 26 years) on parental health plans (although the PCA would allow states to opt out of this provision), the prohibition of total lifetime dollar limits on covered benefits, and the $700 billion in Medicare cuts. The right to health care coverage in the face of preexisting conditions has also been retained, although this guarantee would apply mainly to people who had maintained continuous health insurance coverage. Finally, the all-important reliance on targeted sliding-scale tax subsidies for the purchase of insurance by low- and middle-income families has also been preserved, albeit in a modified form that would make them available to fewer people.
However, that is where the similarities end. Under the PCA, gone is the individual mandate requiring that US individuals purchase health insurance or pay a penalty if they don’t (a hedge against people not buying insurance until they need it), to be replaced by lower premiums for younger enrollees, courtesy of revised age-rating ratios and by the “continuous coverage” mandate. Gone are the federally mandated essential health benefits, which would be replaced by state-defined mandates. Gone (not to be replaced) are the employer mandate, the federal health insurance exchange, the progressive Medicare payroll tax, the medical device tax, and the health insurance premium tax. And gone is the time-honored open-ended tax exemption on the value of employer-provided health plans; instead, health benefits exceeding $12 000 for individuals and $30 000 for families would be taxed as income for the employee.
Above and beyond the preceding provisions, the PCA has all but done away with the federally subsidized expansion of Medicaid by the ACA. Instead, greater reliance is being placed on targeted means-tested tax credits to eligible individuals (those earning less than 300% of the federal poverty level) in search of private health insurance inclusive of current Medicaid enrollees. Other features of the PCA include the conversion of the federal component of Medicaid into a state-run block grant (per capita cap) program, the facilitation of the sale and purchase of health insurance plans across state lines, the amplification of consumer-serving transparency on cost, quality, and outcomes, and the capping of monetary damages and attorney fees awarded in the wake of medical malpractice litigation.
Origins of the PCA
The PCA’s most recent precursor was released on January 23, 2014, by Republican Senators Burr, Hatch, and Tom Coburn (Okla). In addition, the PCA likely represents past health policy insights contributed by experts inside and outside the think-tank community. Yet other elements of the PCA appear to have been inspired by the presidential campaign platforms of Republicans Sen John McCain (Ariz) and former Gov Mitt Romney.
It follows that the PCA—not unlike most health care reform laws—was assembled from pieces of well-trodden policy position papers in a manner reminiscent of a coalescence of various LEGO bricks and plates. However, the universe of policy positions is finite, and the ultimate success of the PCA is contingent on the ability of its crafters to have wisely assembled politically palatable ingredients in keeping with extant sensibilities.
Prospects for Implementation
The PCA, like other health reform proposals, struggles to juggle multiple difficult trade-offs against the backdrop of deeply entrenched and often powerful interest groups. For example, tampering with the time-honored (if regressive) tax exemption extended to employer-sponsored health plans would rile up the employer lobby. And affected employees would likely not be pleased with the prospect of higher out-of-pocket costs. Sen McCain, who espoused a revision of the employer tax exemption, paid dearly for taking this stance during his 2008 presidential campaign. Similarly, revisions to the age-rating ratios to favor the young may well displease older individuals who are not yet eligible for Medicare.
Above and beyond these challenges, the PCA is hardly immune from unintended consequences. For example, the abolition of the mandated essential health benefits may breathe new life into the sale of underpowered “mini-med” health insurance policies (which typically feature very low caps on the amounts they will pay on medical claims) or outright “junk” policies to ill-informed consumers. In addition, the PCA may give pause to women: the plan is mum on the health care premium gender gap (women paying more than men for the same coverage, which the ACA prohibits), not to mention the elimination of the mandated maternity care and contraception benefits that are federally mandated essential health benefits under the ACA. Finally, the PCA appears to focus on health care financing with little in the way of health care delivery reform.
Not unexpectedly, the PCA engendered little enthusiasm on the Democratic side of the aisle. Sen Ron Wyden (D, Ore) and Sen Patty Murray (D, Wash) said the PCA “effectively raises taxes on the middle class, removes bedrock protections for consumers and chips away at key coverage benefits that Americans rely on. In short: nothing in this white paper achieves what millions of Americans have today thanks to the Affordable Care Act—quality, affordable, health care.”
In the 5 years since the enactment of the ACA, Republicans have repeatedly pledged to craft an alternative health care reform plan. Even the latest attempt (HR 596) instructs the 3 chairs of the relevant House committees to present a replacement plan. However, at the time of this writing, no timetable has been laid out for the writing of a PCA bill or for holding hearings on this or competing plans. Moreover, little is known as to how many of the uninsured will be covered by the PCA and at what cost. Indeed, the PCA has yet to be scored by the Congressional Budget Office.
Whether or not to replace the ACA is, of course, a politically charged topic. In the eyes of some, replacing the ACA with the PCA is unnecessary, given the ever-mounting evidence for the success of the former. Others oppose the ACA in any form or view the PCA as a necessary remedy for a flawed ACA replete with “broken promises in the form of increased health care costs, costly mandates, and government bureaucracy.”
Regardless of one’s point of view, it appears unlikely that the PCA or a variant of this bill will be enacted into law as long as President Obama is in office. However, with the Supreme Court’s ruling on King v Burwell (which challenges the federal government’s authority to provide subsidies to individuals who purchase insurance in federally operated insurance exchanges) and the outcome of the 2016 presidential election in doubt, revisiting the PCA or similar proposals may well be required.
About the author: Eli Y. Adashi, MD, MS (firstname.lastname@example.org) is a professor of medical science and the former dean of medicine and biological sciences at the Warren Alpert Medical School of Brown University in Providence, Rhode Island. A member of the Institute of Medicine, the Association of American Physicians, and the American Association for the Advancement of Science, Adashi has focused his writing on domestic and global health policy at the nexus of medicine, law, ethics, and social justice. A former Franklin fellow, Adashi served as a senior advisor on global women’s health to the Secretary of State office of Global Women’s Issues during the first term of the Obama Administration.
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