Complicated Cassidy-Collins Plan to Replace ACA Falls Short

With pressure building around repealing the ACA without a replacement plan, various “replacement” plans are starting to pop up – most recently this bill from Senators Cassidy and Collins. Sarah Lueck at the Center on Budget and Policy Priorities posted a thoughtful analysis of the bill’s key provisions and Timothy Jost offers even more details in his post on Health Affairs.

Though I’m often among the wonky people immersed in the policy details, this bill made me want to zoom out – seeing the forest this time and not the trees. I kept asking myself, what is meant by an ACA replacement?

Looking back at the ACA, it’s clear that one of the major goals was to help those left out of the health insurance market find a way in, like low-income parents (not then eligible for Medicaid) and individuals and families without access to affordable employer-sponsored coverage. But the ACA also shifted the focus from a health care system focused on illness to one focused on prevention. It vastly simplified eligibility and enrollment processes, making it much easier for families to enroll and stay enrolled in coverage. The ACA also allowed more low-income children to access EPSDT – Medicaid’s pediatric benefit that ensures that children are able to grow and thrive.

Perhaps most importantly to us here at CCF, the ACA, building on the strong foundation formed by Medicaid and CHIP, helped us reach historic coverage levels for children. Not too long ago, covering 95% of children in the US felt like an impossible goal. But now, thanks to Medicaid, CHIP, and the ACA, we have reached that goal and are aiming even higher – 100% coverage for children.

So replacing the ACA means preserving these coverage gains and continuing on the trajectory towards 100% coverage. Replacing the ACA means making sure children in low-income families have access to all the services they need for healthy development. Replacing the ACA means making sure parents have affordable coverage so that they can be healthy and more financially secure. Replacing the ACA means giving everyone access to affordable care.

By my estimation, this bill is not a replacement. It would likely lead to fewer people having coverage because it offers states a fraction of the federal funding while allowing them to spread it across a larger group of people at higher income levels and those with employer-sponsored coverage. The bill focuses its attention on marketplace coverage – giving states three options about how to approach reforms to the individual market – but also impacts Medicaid.

States that have expanded Medicaid would be able to shift those enrollees to new Roth HSAs – essentially an account where the government would deposit funds for the individual to purchase health insurance. Of course, there is no guarantee that the amount in the fund would be sufficient to allow low-income individuals to purchase private coverage, and any coverage purchased could include a high-deductible plan that is of little value to low-income people. States that have not expanded Medicaid would receive funding as if they had, but matched at 95% FMAP, instead of the 90% FMAP that the ACA requires over the long term, and without any of the requirements about essential health benefits and actuarial value. States would get more money, but beneficiaries would end up with less.

Not only is this bill inadequate as an ACA replacement, there is no consensus. Senator Paul has also outlined his idea of what a replacement should look like but there is no agreement about his approach either. In fact, there are not only significant differences among Republicans about how to replace the ACA, there are also significant differences about how to repeal it.  Should repeal include the fees and other revenue provision from the ACA? Should repeal include the Medicaid expansion?

We’re likely to see more about what repeal looks like and a series of bills claiming to replace the ACA over the coming days and weeks, especially after Republicans spend time sorting through these issues this week at their retreat in Philadelphia. But each time a new bill emerges, we’ll ask the same questions. Would this bill help maintain children’s coverage levels of 95%? Would it help us reach the goal of 100% coverage? Not so far.