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Federal Budget Watch, Jan. 27

Posted January 30, 2017 by Samantha Curran
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By Samantha Curran

CFI Communications Associatebinoculars-954021_1280

Federal Budget Watch was on hold for a bit given the inauguration, and then a flurry of quickly changing budget developments began. So, with the latest D.C. intel from our colleagues at the Center on Budget and Policy Priorities, let’s get to it.

Things are moving fast and furious now that President Trump has officially taken office. This week’s Federal Budget Watch discuses important information regarding Republican plans to replace the Affordable Care Act.

House and Senate Republicans are holding a joint retreat this week in Philadelphia to discuss policy priorities and legislative plans for the 115th Congress. Speaker Ryan announced that the top three priorities for the next few months are ACA “repeal and replace,” building the wall and tax reform.

House Energy and Commerce Chairman Greg Walden said he doesn’t expect to come out of the retreat with an ACA replacement plan ready. He said many details of the plan will be worked out over months of committee hearings and debate.

This is further evidence that the timetable on the key ACA repeal vote is slipping in both the House and Senate. Republican leaders appear intent to pass that bill by the April district work period recess and they expect the House committees will have their ACA replacement reconciliation bill ready for a vote by the end of February.

Although there are no concrete details for what the ACA replacement plan will look like, there are a few important implications that may have an impact in shaping Republicans’ replacement policies.

This week, Rep. Tom Price (R-GA), President Trump’s nominee to be Secretary of Health and Human Services, appeared before the Senate Finance Committee. While he was mostly vague on ACA replacement policies, he did push for states to get more flexibility in Medicaid. Rep. Price also refused to promise that no one would lose coverage from President Trump’s executive order related to the ACA.

In addition, Senators Cassidy (R-LA) and Collins (R-ME) unveiled an ACA replacement plan, the “Patient Freedom Act,” earlier this week. Here is the legislative text and a one-page summary.

The Center on Budget and Policies Priorities blog, Senators’ ACA Replacement Won’t Likely Give States, Patients the Choices They Seek, notes that “the Cassidy-Collins plan would likely leave many millions who now rely on ACA health coverage, especially those with low incomes and pre-existing health conditions, uninsured or going without needed care. That’s partly because the bill punts major decisions about how to respond to ACA repeal to the states but then scales back the federal support available to cover people.”

Senator Rand Paul also released a plan yesterday, which our friends from The Center are currently analyzing. Neither of these bills will move forward, but they may have an important impact on the policy decisions made.

To gather more information on the various GOP health proposals, including what the proposals do, what they’ll say, how the proposals fall short and how they differ from the ACA, see The Center’s “False Promises Primer” matrix.

Governors’ Action on ACA Repeal

The National Governors Association Chair McAuliffe and Vice Chair Sandoval sent a letter to Congressional leaders in response to a request for feedback from the Governors. The letter contains some very useful language in responding to proposals for a Medicaid block grant or per capita cap.

Of particular note:

  • Support for vulnerable populations is a shared responsibility between the federal government and the states. In considering changes to Medicaid financing, it is critical that Congress continue to maintain a meaningful federal role in this partnership and does not shift costs to states. This includes the need for continued financial and programmatic flexibility to innovate and improve the efficiency of our Medicaid programs through new and existing health care transformation initiatives.
  • Any reform proposal should protect states from unforeseen financial risks – such as the recent economic downturn or higher costs due to new drugs, treatment or epidemics – that could result in a spike in Medicaid enrollment or increased per-beneficiary costs. Congress should also recognize and leverage the technological and administrative advancements already made and paid for under the ACA.

ACA Repeal Would Have Significant Consequences

Nearly 30 million adults and children would lose coverage by 2019 if the new Republican majority repeals the Affordable Care Act (ACA). The Urban Institute’s state fact sheets breakdown this data by income, age, employment status, race and education.

Public pressure is mounting on Republicans to have a comprehensive replacement plan in place to ensure no one loses coverage and the critical protections of the ACA remain intact, before a repeal vote happens. “Repeal and promise” or “repeal and delay” would have immediate and disastrous consequences, based on a report from the Urban Institute.

In addition, the 400 highest-income taxpayers each would receive an average annual tax cut of about $7 million if the ACA’s taxes used to finance the coverage expansions were repealed, while about 7 million low- and moderate-income families would see their taxes raised, according to The Center’s new analysis.

The tax cut for the wealthy would come from repealing the ACA’s increase in Medicare taxes for individuals with incomes above $200,000 a year, and households with incomes above $250,000. The 400 highest-income taxpayers would receive a total tax cut of $2.8 billion a year, while 160 million households with incomes below $200,000 would get nothing. The $2.8 billion is roughly the value of the premium tax credits that would be taken away from 813,000 people in the 20 smallest states and Washington, DC under repeal.

For more resources around the ACA and repeal efforts, visit the Center’s Heath page.

Contact info for Colorado congressional delegation:

Sen. Cory Gardner – 303-391-5777 Email here.
Sen. Michael Bennet – 303-455-7600 / 866-455-9866 Email here.
Rep. Diana DeGette (CO District 1) – 303-844-4988 Email here.
Rep. Jared Polis (CO District 2- 303-484-9596 ) Email here.
Rep. Scott Tipton (CO District 3)- 970-241-2499 Email here.
Rep. Ken Buck (CO District 4)- 970-702-2136 Email here.
Rep. Doug Lamborn (CO District 5)- 719-520-0055 Email here.
Rep. Mike Coffman (CO District 6)- 720-748-7514 Email here.
Rep. Ed Perlmutter (CO District 7) – 303-274-7944 Email here.

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