Senator Cassidy Presents Competing Options to Replace the ACA

At the AcademyHealth National Health Policy Conference in Washington, DC, Senator Bill Cassidy, R-Louisiana, spoke about a potential replacement of the Affordable Care Act (ACA) and the options that the Republican administration is considering.

“A recurring theme on the campaign trail was people saying care was forced on them that they did not need,” Cassidy told the audience. "So we decided to address that and realized that we need an integration of process, policy, and payment," he said.

With respect to process, there will be a budget reconciliation bill, which he said needs 51 votes to pass the Senate. He expects that the individual and employer mandates will be repealed. “Total repeal and replacement of the ACA needs a total of 60 votes to pass,” which would mean Republicans would need 8 Democrat votes. Next comes the second budget reconciliation bill, which will need comprehensive tax reform and has a 51-vote threshold.

“We have competing ways of what we want to achieve, compared with the ACA,” Cassidy said.

Providing insight on the various options that are being floated around for replacing the ACA, Cassidy highlighted a few key features about the plan developed by the House Ways and Means Committee:

• It would repeal all ACA “pay-fors” in 2 to 3 years, which will pave the path for corporate tax reform.
• Those who are currently receiving subsidies would not get them. The Committee is uncertain on Medicaid expansion.
• The plan will revert to using the old Republican strategy of block grants for Medicaid.
• The plan promotes state-based benefit design.
• The plan proposes creating high-risk pools for the more expensive patients
• Children will be allowed to remain on their parents’ insurance till age 26.

Cassidy, who believes that states will be faced with a financial crunch, said, “They may not be able to carry on with one-fifth their income.”

He then presented the recommendations of the Patient Freedom Act, which he introduced with Susan Collins, R-Maine, last week. “Under our plan, states can choose between 3 options,” Cassidy said. These options include:

• Adopt the Freedom Act. If someone does not get tax benefit from employer-sponsored insurance, they will be eligible for a credit. “The high-spending patients will get additional credit. For example, we know that a woman in her early twenties, who’s at a child-bearing age, costs 1.64-times more than a man the same age.” So women in that age group would get more credit. Cassidy added that a family policy remains an option and employer-sponsored plans can fund the credit. “The plan also allows employees the flexibility to carry their credit when they change their job,” Cassidy explained.

“Another feature of our plan is passive enrollment, which provides room to spread the insurance spend of high-cost patients in the population, rather than keep it concentrated,” Cassidy said.

• States have the choice to design their own alternative replacement for the ACA, but would not receive federal assistance.
• States like New York and California that want to continue implementing the provisions of the ACA will have the freedom to do so. They would continue to receive subsidies and tax credits for residents and would remain bound by the individual and employee mandates.

Cassidy was quite confident about a replacement for the ACA—the question, of course, is, how soon will it happen?