But the bill would go further as well, making changes to the underlying Medicaid program that House Energy and Commerce Committee Chairman Greg Walden (R-Ore.) described as “the biggest entitlement reform in the last 20 years.”

Currently, Medicaid costs are shared between states and the federal government, but the funding is open-ended, so the federal government pays its percentage of whatever states spend. Under the proposed bill, the amount of federal funding would be capped on a per-person basis, so funding would go up as more people qualify. But that per-capita amount might not grow as fast as Medicaid costs, which could leave states on the hook for an ever-increasing share of the costs of the program.


“Capping federal contributions to the Medicaid program will likely force states with already tight budgets to limit eligibility and cut benefits to at-risk Americans,” said the American Public Health Association in a statement.

Help for wealthier people
If you earn a lot of money, or even just enough to put aside something extra for health expenses, the GOP bill will provide a lot to like.

First, it would repeal almost all of the taxes that were increased by the ACA to pay for the expansion of health coverage. Those include higher Medicare taxes for high-income earners, a tax on investment income, and various taxes on health care providers, including insurance companies, makers of medical devices and even tanning salons.

The bill would also provide new tax advantages for those who can afford to save — including allowing more money to be deposited into health savings accounts, and lower penalties for those who use those accounts to pay for non-medical needs.

In addition, the plan would lower the threshold for deducting medical expenses on income taxes and allow people with job-based tax-preferred “flexible spending accounts” to put away more pretax money. It would also restore over-the-counter drugs as eligible for reimbursement from those accounts.

Mandates to buy or provide coverage
The GOP plan doesn’t actually repeal either the requirement for individuals to have coverage or for employers to provide it. That’s because it can’t under budget rules. Instead, the bill would reduce the penalties in both cases to zero, rendering the requirements moot.

The individual requirement was used by the health law to force healthy people into buying coverage to help improve insurers’ risk pools since they could no longer bar customers with preexisting conditions. Instead of the requirement that most people obtain health insurance or pay a penalty, the Republican plan would provide a penalty for those who do not maintain “continuous coverage.” Those with a break in insurance coverage of more than 63 days could still purchase insurance without regard to preexisting health conditions, but they would be required to pay premiums that are 30 percent higher for 12 months.

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