(Bloomberg) — Republicans unveiled their long-awaited legislation to repeal and replace the Affordable Care Act, proposing to phase out key parts of the law over several years as they try to break through a stalemate between moderates and conservatives in their party.

Called the American Health Care Act, House Republicans’ proposal includes a refundable, age-based tax credit to help people buy insurance. It also ends a requirement to have coverage, and would eventually eliminate many taxes used to fund the 2010 law. Other changes, like a wind-down of an expansion of Medicaid, are phased in over a period of years.

It’s not clear whether the proposal can win the support of House conservatives or clear the Senate — where Republicans possess a razor-thin margin and are relying on a fast-track legislation procedure full of limitations. There’s also been little involvement from President Donald Trump, who has eschewed detailed policy proposals in favor of tweets and broad promises about better health care for less money.

[Image credit: Bloomberg]
[Image credit: Bloomberg]

Yet seven years after Republicans began promising repeal, the proposal is the most comprehensive look yet at how the GOP will approach replacing the health law, which brought coverage to an estimated 20 million people. Republicans have blamed the ACA for rising insurance premiums and high out-of-pocket costs, and criticized its requirement that everyone have health insurance or pay a penalty.

Republican splits
The proposal released Monday night represents an attempt to appease different factions within the party. While conservatives have pushed for full, immediate repeal, one concern among some moderates is that too-sudden changes would callously toss people out of coverage right away — particularly those in Medicaid, the federal-state program for the poor that was expanded under Obamacare.

“It looks like they’ve moved toward a better transition period, more flexibilities for the governors and ability for the Medicaid expansion population to have the assurance that they’re not going to be left out in the cold,” said Senator Shelley Moore Capito, a West Virginia Republican who had threatened not to support the proposal if Medicaid wasn’t addressed. “It’s moving in the right direction.”

House Speaker Paul Ryan said in a statement the plan is designed to “drive down costs, encourage competition, and give every American access to quality, affordable health insurance.”

Bill details
A copy of the bill is available here, and two House committees will start work on moving it forward on Wednesday.

Key provisions include:

  • An advanceable, refundable tax credit to help buy insurance for individuals, that phases out for people making more than $75,000 ($150,000 for a couple filing jointly). The credit starts at $2,000 per person and grows to $4,000 with age. A family can get as much as $14,000 in total.
  • Immediately ends a requirement that individuals have insurance coverage and another rule that requires some businesses to offer coverage to their workers.
  • Expands the allowable size of health-care savings accounts that can be coupled with high-deductible insurance plans, up to $6,550 for an individual or $13,100 for a family. Winds down Obamacare’s expansion of Medicaid.
  • Changes it to a per-capita system, where states are given a set amount for the number of people in categories including the disabled, elderly, childless adults and pregnant mothers.
  • Allows people with pre-existing conditions to buy insurance, but requires “continuous” coverage to discourage people from buying it only when they get sick. Individuals who go uninsured for longer than a set period face 30 percent higher premiums as a penalty.
  • Gives states a $100 billion fund over a decade to help lower-income people afford insurance, and to help stabilize state insurance markets. The fund could be used to help lower patients’ out of pocket costs or to promote access to preventive services.
  • Delays until 2025, instead of permanently repealing, a tax on high-cost health insurance plans.

No cost estimate
There was no estimate of how much the bill will cost or how many people it will cover, creating a risk for Republicans as they move forward. The proposal is paid for by eventually repealing Obamacare’s expansion of Medicaid, cutting insurance subsidies and by keeping, but delaying, a tax on high-cost insurance plans.

“You want to know it’s fiscally responsible,” Senator Bill Cassidy, a Louisiana Republican, said in an interview. “You want to know the taxpayer can’t get hosed, without gimmicks, right? And you’d want to know that folks, that President Trump, who said he wants as many people covered, you’d want to see his pledge fulfilled, at a lower cost."

It’s not clear whether the measure can win the support of House conservatives, who have demanded a more complete repeal. Earlier drafts prompted stiff criticism from some who complained that concerns over the cost, size and nature of the tax credits weren’t adequately addressed.

And even with the Medicaid provisions, there are other risks. Two Senate Republicans — Susan Collins of Maine and Lisa Murkowski of Alaska — oppose plans to defund Planned Parenthood that are included in the bill.

Democrats react
Democrats immediately panned the bill, which the GOP has kept out of sight during its drafting.

“Congressional Republicans are leading a desperate forced march to pass a dangerous bill written in secret which few members of Congress have seen, let alone read,” Senator Ron Wyden, of Oregon, said in a statement Monday night.

Democrats also argued that people currently covered under Obamacare would be worse off.

“The Republican repeal bill would charge them more money for less care,” representatives Frank Pallone of New Jersey and Richard Neal of Massachusetts said in a statement. They are the top two Democrats on the House Energy and Commerce Committee and Ways and Means Committee, respectively.

For Republicans and Trump, gutting the ACA became a campaign rallying cry. Trump told Congress on Feb. 28 that he will “replace Obamacare with reforms that expand choice, increase access, lower costs, and at the same time provide better health care.’’

“Time to end this nightmare,” Trump tweeted on Monday night after the bill was released.

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