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Talking Points
January 2017

Cassidy/Collins ACA Replacement Proposal Falls Far Short

The Cassidy/Collins proposal is not a true replacement for the Affordable Care Act. It would cover significantly fewer people than the ACA and gut consumer protections, allowing insurers to once again discriminate against people with pre-existing conditions and charge women higher premiums than men.

It would also increase premiums and deductibles for low- and moderate- income people, all while giving a tax break to the wealthy, and gut health plan benefit requirements, putting people at risk of losing coverage for essential care, including maternity care, prescription drugs, and mental health care. 

The bill gives states three options: 

  1. Keep the ACA but with less federal funding  
  2. Repeal the ACA and implement an “alternative” plan with less federal funding
  3. Repeal the ACA and forgo all federal funding to implement an alternative

Here’s a breakdown on how this plan falls short: 

States that want to keep the ACA would have to jump through the legal and political hurdles to do so.

  • Even then, they would only get 95 percent of the money that would have helped their residents afford coverage under the ACA. This means that even in these states, lower- and moderate-income families would see their health care costs increase unless states can find state dollars to cover the difference.

Their proposed state “alternative” plan will hurt millions, particular lower- income individuals, and people with pre-existing conditions: 

  • This alternative plan would cover significantly fewer people, and reduce the amount of help lower- and moderate-income people get to help afford coverage and care.  
     
    • States would get only 95 percent of the funding that would have been spent on financial assistance with coverage under the ACA and would have to use this funding to provide financial assistance to even more people, including people with much higher income. Lower- and moderate-income families who need help the most would get less help with the cost of coverage and care.
    • Lower and higher income people would get the same amount of financial assistance. For example, someone making $90,000 a year would get the same amount of federal help affording coverage as someone making $20,000. This backward approach will leave coverage unaffordable for millions of lower- and moderate-income families. 
    • This plan would provide assistance through a complicated new type of health savings account that would actually tax people for the federal assistance they receive. This further reduces the actual amount of help that people receive to make care more affordable.
       
  • This plan would increase deductibles and slash people’s benefits. 
     
    • Individuals could automatically be put into coverage with even higher deductibles than they likely have today. And lower income people would have less financial assistance to pay these increasing costs.
    • Plans would no longer be required to cover core benefits, like comprehensive mental health and substance use disorder care, comprehensive prescription drug coverage, maternity care, and rehabilitative care. 
    • People could automatically be put into coverage with a prescription drug benefit that is so skimpy it doesn’t cover brand name drugs.  
    • Most people would lose free coverage for the majority preventive services they are guaranteed under the ACA.
       
  • This plan would allow insurers to once again discriminate against people with pre-existing conditions, women, and older people.
     
    • Insurers would be allowed to deny coverage, charge higher premiums for coverage, or exclude certain benefits based on health status if someone experiences a gap in coverage as short as 64 days. This leaves people who face a short gap in coverage due to financial hardship with no way to purchase affordable coverage.  
    • Insurers could go back to charging women higher premiums than men for the exact same coverage. 
    • There would be no limit on how much more expensive premiums could be for older people compared to younger people.
       
  • This plan would expand tax shelters for the wealthy. 
     
    • This bill would create a new type of health savings accounts (HSA) –Roth HSA- that anyone can use regardless of their type of coverage. Money put into this HSA would grow tax-free, creating a new tax shelter for people who have maxed out contributions to 401ks. 
    • Health Savings Accounts are not health insurance; they merely provide a place where people can stash their own money to later spend on health care. 
    • These accounts don’t work for most families, especially those living paycheck to paycheck, who can’t afford to set aside thousands of dollars to pay the full cost of their health care bills. 
       
  • The plan would be particularly harmful for people with Medicaid. 
     
    • States would have to option to enroll those eligible for coverage through the Medicaid expansion into private plans, subjecting enrollees to higher out-of-pocket costs and skimpier coverage.
    • For many, access to this private coverage simply wouldn’t be meaningful, as low-income enrollees wouldn’t be able to afford premiums and cost-sharing associated with their plan. 
    • In addition, moving these low income Medicaid enrollees to private coverage would subject them to discrimination based on age, gender, and pre-existing conditions.