Republican Senators Unveil Proposed Bill as a Partial Replacement of the ACA | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Republican Senators Unveil Proposed Bill as a Partial Replacement of the ACA

January 23, 2017
by Heather Landi
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Two Republican Senators, Bill Cassidy of Louisiana and Susan Collins of Maine, on Monday unveiled a proposed bill, called The Patient Freedom Act of 2017, that, rather than dismantling the Affordable Care Act (ACA), offered a partial replacement that would allow states to continue operating under the law if they choose.

The proposed bill, which Senators Cassidy and Collins discussed during a press conference today, would be a replacement plan for the ACA and enables states to stay with the ACA or opt to receive a similar amount of federal money under the alternative “default” plan. Under the alternative plan, the funding would be used to set up health savings accounts and consumers would use that money to pay for health insurance and medical care.

“We’re moving the locus of repeal to state governments,” Sen. Cassidy said during the press conference.

Collins said, “Ours is the only bill in the Senate that has the unique combination of allowing states to choose to keep the ACA if it is working for their residents and still receive the subsidies, the tax credits, the consumer protections and still be bound by the individual and employer mandate. The other option, the default option... allows states to cover the uninsured population by providing a standard plan, a high deductible, basic pharmacy coverage, preventive care such as free childhood immunizations, and financed by a health savings accounts.”

On Friday, Jan. 20, President Trump signed an executive order that could open the door for federal agencies to curtail some aspects of the Affordable Care Act. When asked by reporters at the press conference about President Trump’s executive order and how that might work in conjunction with Congress, Collins responded, “The executive order is very confusing and we really don’t know yet what the impact will be, until there is a Secretary [of the Department of Health and Human Services (HHS)] in place who can interpret the regulations and do the rulemaking to rescind the regulations, it’s very difficult to say what the impact of the executive order is going to be. As someone, regardless of who is president, has always felt that Congress should set the rules and write the laws, we need legislation. There are some improvements that can be made through the executive order process and through the regulatory process, but by no means does that take away the need for comprehensive legislation.”

Trump has nominated Rep. Tom Price (R-GA) to be HHS Secretary, and Price is scheduled to appear before the Senate Committee on Finance on Tuesday, January 24. Cassidy pointed out that The Patient Freedom Act of 2017 has similar features to a previous bill proposed by Rep. Price, called The Empowering Patients First Act, such as the use of advanceable, refundable tax credits and the use of health savings accounts, he said.

According to information provided by the two senators, the Cassidy-Collins bill would repeal federal mandates under the ACA, such as the individual mandate and the employer manage and would keep consumer protections, including prohibitions on annual and lifetime limits and the prohibition of pre-existing condition exclusions.

The proposed bill would repeal Title I of the ACA and would allow states to choose one of three options:

  • Reimplementation of the ACA and states would continue to receive federal premium tax credits, cost-sharing subsidies and Medicaid dollars, but subsidies cannot exceed the contributions that would have been made under option 2
  • Choose a new state alternative. According to Cassidy and Collins, this option would enable states to continue to receive funding equal to 95 percent of federal premium tax credits and cost-sharing subsidies, as well as the federal match for Medicaid expansion. States can choose to receive funds in form of per beneficiary grants or advanceable, refundable tax credits, but in both cases, funds will be deposited in a Roth Health Savings Account (HSA).
  • Design an alternative solution without federal assistance

Under this proposed bill, under option 2, states will be able to auto-enroll uninsured individuals in basic health care coverage, and the basic health plan would provide all eligible individuals with a health savings account, a high deductible health plan, and a basic pharmacy plan.

According to Cassidy, the bill also includes a focus on population health. As outlined by Cassidy, under the proposed legislation, 2 percent of the funding that states receive could be used for population health initiatives. “As one example, my state has a high rate of HIV and if we took that money and put in programs to decrease the transmission of HIV that would have an incredible impact on population health and population expense, and we’d leave that to every state as every state has its own issues,” he said.

Comments made by Cassidy and Collins during the press conference while discussing their proposed ACA replacement bill perhaps reflected the complexities of repealing and replacing the ACA. When asked by a reporter if the proposed bill represented a retreat from “repeal and replace,” Cassidy said, “At some point in this process we need a bill that can get 60 votes. If you can say to a blue state senator who’s really invested in supporting Obamacare, you can keep it, but why force that on us, we think that helps us to get to 60. The reality is, we won’t get to 60 if we keep the locus of repeal on the federal capital, we need to move the locus of repeal to state capitals and to allow those states to decide the best system for them and to fulfil our promise of repeal but you can keep insurance if you like.”

Collins added, “I believe there has been a sea change in attitudes on how we should approach this dilemma. Initially all the talk was just about repeal, and then there was a growing consensus that we needed to not only repeal but replace very quickly thereafter. I believe most members of the Senate and House are eager to have a repair or replacement bill at about the same time or shortly thereafter, given the constraints of reconciliation of the repeal.”

During the press conference, Cassidy also said the proposed bill could potentially cover more people than the ACA, including the approximately 30 million Americans who currently don’t have insurance, although he acknowledged that the bill had not been reviewed by the Congressional Budget Office (CBO).

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