GOP Introduces Bill to Repeal Health Reform; Cabinet Letter To Congress Supports Health Care Law; CBO Estimates Cost of Repeal
On January 5, 2011, GOP Members of the House of Representatives introduced legislation entitled “Repealing the Job-Killing Health Care Law” (HR 2) and three cabinet Secretaries, including the Secretary of Health and Human Services (HHS), sent a letter to Members of Congress emphasizing the merits of the Affordable Care Act (ACA). An HHS press release that accompanied the Secretaries’ letter stated that its purpose was to provide an “update on implementation” of ACA and discuss how ACA will “continue to give Americans more freedom in their health care choices” as the implementation of health reform unfolds during 2011.
The legislation and the letter came as the 112th Congress convened with Republicans taking control of the House of Representatives. The Secretaries’ letter acknowledges that the repeal of ACA has been “proposed by some,” but urges Congress to stay the course after considering all that ACA has “already done to improve the health and financial security” of many Americans.
Then, on January 6, 2011, the Congressional Budget Office (CBO) weighed in with its own letter to the House of Representatives about HR 2. While the CBO letter states that the CBO has “not yet developed a detailed estimate of the budgetary impact of repealing” ACA, it nevertheless suggests that HR 2 would “probably increase federal budget deficits” over the eight year period from 2012–2019 by “a total of roughly $145 billion.” According to the CBO letter, approximately $15 billion of that total represents the reduction brought about by the Medicare and Medicaid Extenders Act of 2010 (MMEA) in the estimated cost of subsidies to be provided through the insurance exchanges (see the McDermott White Paper on the MMEA).
Majority Leader Eric Cantor (R-VA), the sponsor of HR 2, stated earlier that in estimating the savings and costs of ACA the “CBO [only] did the job it was asked to do by the Democratic majority” at the time and that, as a result, the passage of health reform was “filled with budget gimmickry.” The CBO letter acknowledges that “projections of [HR 2’s] budgetary impact are quite uncertain,” but that the CBO believes its estimates of the net budgetary effects “have a roughly equal chance of turning out to be too high or too low.”
The seven-page letter from the Cabinet Secretaries contains the following “highlights” from ACA and emphasizes some of the controversial as well as non-controversial provisions in the law:
- State-based Insurance Exchanges. These are to be operational in 2014 and according to the letter could potentially reduce premiums by 14 to 20 percent for currently insured individuals versus rates such individuals might otherwise pay for insurance.
- Medical Loss Ratio Rules For Insurance Companies. Insurers are required to spend at least 80 to 85 percent of insurance premium dollars on health care and “quality improvement.”
- Closed Donut Hole. In 2010, nearly 3 million senior citizens received rebate checks of $250 each to help pay for prescription drugs.
- Pre-Existing Conditions. Children under age 19 cannot be denied insurance coverage due to a pre-existing condition. Young adults up to age 26 are able to stay on their parents insurance.
To review the complete Secretaries’ letter, click here, and for the CBO letter, here.
