There have been several proposals offered up in Congress as alternatives to the Affordable Care Act, yet none so far have met the standards to satisfy either legislators or those who work in the healthcare industry enough to move successfully through the legislature.
Looking for a show of support for his proposed ACA replacement bill, Sen. Bill Cassidy (R-La.) on Tuesday addressed National Association of Health Underwriters members at the 27th Annual Capitol Conference on the details of the bill.
One key point of distinction, Cassidy said, is his bill — the Patient Freedom Act — will allow each state the option to determine what type of insurance would be best for its residents.
“I have found that if the patient has the power the system needs to line up to serve her,” Cassidy said. “What works in one state may not work in another, so if we return the regulation of insurance back to the states, I think it is more likely that the states will put together a plan that works for them.”
In Cassidy’s proposal — introduced in January with Sen. Susan Collins (R-Maine) — the bill intends to repeal five federal mandates under the ACA. These mandates include: the individual mandate, the employer mandate, essential health benefits, actuarial value requirements and age band requirements.
The parts of the ACA Cassidy wants to keep are essential consumer protections, he says, which include guaranteed issue, guaranteed renewability, no annual or lifetime limits, dependent coverage through age 26, prohibiting a pre-existing condition exclusion and prohibiting discrimination based on health status.
“When you speak of Obamacare, people generally think of penalties, the mandates, the mandated benefits and the resulting higher cost,” Cassidy said. “They’re not thinking of provisions to reform the care in independent health service, which is kind of an add-on at the very end.”
The Patient Freedom Act offers three options:
1) Better Choice Plan. In this plan option, states determine their own insurance regulations and receive funding equal to 95% of Obamacare tax credits and Obamacare Medicaid expansion funding in the form of either a per capita block grant or an advanceable and refundable tax credit. The tax credit would also be age-adjusted and means tested, according to the bill proposal.
2) No federal assistance. In this option, states do not receive any money for tax credits or Medicaid expansion. This led to an audience question of whether or not ‘blue states’ would take this option and initiate a single-payer plan to allow a single public or quasi-public agency to organize healthcare financing, with delivery of care remaining largely in private hands. Cassidy said it would be possible to take this route and initiate single-payer plans. However, funding would not be easy. “Vermont attempted to do this and as it turns out, it is really hard to put together a single-payer plan,” Cassidy said. “So, in the hypothetical that could occur.”
3) Maintain current trajectory. State legislatures vote to re-impose mandates, exchange plans, federal premium and cost-sharing subsides. States that choose this option will only receive funds in equal manner to those states that choose the Better Choice Plan.
The responsibility of the broker
In the Better Choice Plan, all individuals receiving the health credit would receive a Roth HSA, an HDHP and a basic pharmacy benefit plan. Cassidy explained. The only mandated benefits would be those required of ERISA plans.
Cassidy said, for example, if a person moves into an employer-sponsored health plan, they can move the money they have saved within their individual Roth HSA into an HSA under the employer, allowing the employee to enroll into a richer health plan with the money saved.
Cassidy added that it is the responsibility of the advisers and brokers to explain these strategies to the employees so that they will have a better understanding of how to pursue a health plan that suits their needs.
“The value that you bring to a small business woman, to go to the folks she employees, to explain this to them and how they can leverage it to a richer plan using their credit is something that you will be responsible for,” Cassidy said to the NAHU members.
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