On January 23rd, Senators Bill Cassidy and Susan Collins introduced the Patient Freedom Act of 2017 to largely repeal and replace Title 1 of the Affordable Care Act (ACA), which includes insurance reforms. Certain ACA provisions would remain, including changes to the Medicaid program (e.g., Medicaid expansion) and Medicare and ACA revenue provisions. In addition, the bill would immediately reinstate many of the most popular ACA provisions:
- Ban on lifetime and annual coverage limits
- Coverage of young adults up to age 26 through family plans
- Prohibitions of preexisting condition exclusions (for those who maintain continuous coverage)
- Guaranteed issue and renewal of insurance (for those who maintain continuous coverage)
- Preventive services no-cost coverage requirement (unless the individual receives employer contributions to the new Roth Health Savings Accounts [HSAs])
- Non-discrimination rules under Section 1557 of the ACA
- Requirement to cover mental health and substance use disorder services in parity
- Section 1332 State Innovation Waivers
- The Federally-Facilitated Marketplace (FFM) (as a state option)
States then could choose from three options:
- Reinstate Title 1 of the ACA in full in their state, including the coverage mandates, Exchange, advance payment tax credits (APTCs) and cost-sharing reductions (CSRs) prorated to 95% for eligible residents, small business tax credits and Section 1332 waivers (Medicaid expansions could also be maintained).
- Adopt an alternative reform utilizing Roth HSAs, as outlined in greater detail below. This would be the default option for non-selecting states.
- Revert to pre-ACA law or implement a state-based system for which the state would receive no federal contributions.
In states that select or default to option two, federal subsidies for health insurance premiums and cost-sharing would be provided via newly-established Roth HSAs. The total allotment in a state would be 95% of the funding that would have been received via APTCs and CSRs, plus – in states that choose to cover their Medicaid expansion population via Roth HSAs – a 95% federal Medicaid match for those individuals. The total funding would then be divided among eligible individuals with adjustments made for age, geography and income (but not other rating factors).
While the total funding available would be decreased, the pool of eligible individuals would increase, with eligibility phasing out at $90,000 in annual income for individuals, and $150,000 in annual income for families. In place of the mandates, individuals would be subject to limited open and special enrollment periods as well as penalties and underwriting if they fail to maintain continuous coverage. States could also auto-enroll individuals into bare-bones High-Deductible Health Plans.
The bill also includes rules regarding provider billing for emergency health care and prescription drugs, price transparency, and cross-subsidization of insurers as individuals change carriers.