Republicans Risk Passing New Health Bill by Defunding Planned Parenthood

Republicans Risk Passing New Health Bill by Defunding Planned Parenthood

© Nathan Chute / Reuters

Details of the House Republicans’ proposal to repeal and replace the Affordable Care Act leaked out late last week, including some that are certain to spark a political firestorm on Capitol Hill.

Many aspects of the House proposal for dismantling the taxpayer-subsidized health insurance program already are widely known, particularly the elimination of the unpopular individual mandate requiring people to purchase insurance or pay a penalty, tax credit subsidies based on an individual’s income, and hundreds of billions of dollars’ worth of tax increases aimed primarily at upper middle-income earners, the wealthy and businesses.

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The latest version of the House GOP plan disclosed by Politico on Friday would also gradually phase out expanded Medicaid coverage for able-bodied low-income people in 31 states and the District of Columbia by 2020, convert the regular Medicaid program to a block grant state system, and provide states roughly $10 billion a year to create so-called high-risk pools for older and sicker people.  

The Republicans would preserve some elements of Obamacare, including allowing children to stay on their parents’ health care plan until age 26 and allow people to sock away far more in their tax-exempt health savings accounts than the law currently allows.

Some portions of the plan would take effect immediately upon passage of the legislation while others would take until 2020 to implement.

But precisely how House Speaker Paul Ryan and other Republican leaders go about raising revenues to replace the Obamacare taxes and underwrite the cost of a replacement plan -- including premium subsidies and incentives to the insurance industry to stay in the market -- are likely to spark resistance from many Republicans as well as Democrats.

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Here are a few of the highlights of the House GOP plan to replace Obamacare:

  • In place of the Obama taxes, the GOP replacement plan would be financed by limiting federal tax breaks on generous health care plans that employees obtain through their employers. The tax exclusion costs the federal government an estimated $260 billion in income and payroll taxes in 2017, which makes it the single largest tax expenditure. The Republicans would cap the tax exemption for workers paying premiums on high-end health care policies.

  • Republicans would preserve the ban on discriminating against people with pre-existing conditions in one form or another, but they will impose a “continuous coverage exclusion” to protect insurers from excessive losses.
  • In place of Obamacare’s income-based tax subsidies that help low and middle-income people the most, Republicans would create “refundable” tax credits that vary by age and help older Americans the most. The tax credit would be stepped, beginning with $2,000 a year for people under the age of 30, and would increase by increments of $500 for each successive age group. The highest annual credit -- $4,000 – would go to people 60 and older.

  • To help relieve insurance companies saddled with risk pools top heavy with older and sicker people, the GOP plan would provide states with a total of $100 billion over the coming decade to provide coverage to these people who may have trouble acquiring policies in the individual market. Whether that would be nearly enough to meet the cost is a point of contention.

Insurers complain that many people wait until they are sick to purchase health insurance instead of when they are healthy and not in need of costly medical attention. The House GOP proposal includes penalties for individuals who fail to maintain continuous coverage. If they permit their insurance to lapse and then decide to re-enroll, they would be hit with a 30 percent boost in premiums for a year.

Related: Americans Sour on Trump and Congress as Replacing Obamacare Flounders

A major wild card in the unfolding debate was the House leadership’s decision to include a provision to defund Planned Parenthood and other health organizations that provide abortions, according to The Hill.  The one-year ban on Medicaid funding to Planned Parenthood has long been sought by congressional Republicans and anti-abortion forces and would be a major victory for them.

Planned Parenthood provides sexual and reproductive health care, education, information, and outreach to 2.5 million women and men in the United States every year. About three percent of all Planned Parenthood health services are abortion related, according to the organization, but federal dollars cannot be used to fund those services.

Still, anti-abortion activists argue that all funding for Planned Parenthood is fungible, and they want to make sure federal funding doesn’t indirectly facilitate abortions.

According to The Hill, the Republicans would have a tough time passing Obamacare repeal and replace legislation if it includes a ban on Planned Parenthood funding. The Republicans hold a slender 52 to 48 majority in the Senate, and Republican Sen. Lisa Murkowski of Alaska said last week she would not vote for any repeal that defunds Planned Parenthood.

“Taxpayer dollars should not be used to pay for abortions, but I will not vote to deny Alaskans access to the health care services that Planned Parenthood provides,” she said. It would take the defection of just three Senate Republicans to halt the repeal and replace movement in its tracks.