Congressman Tom Garrett (VA-05)
Repeal the ACA & Necessary Reforms to the AHCA
- Full Repeal of the ACA
- Eliminate the “Advanced Refundable Tax Credit” in the AHCA & run system through Health Saving Accounts, Significant HSA Reform Modeled after Indiana Gov. Daniels & Gov. Pence’s HSA/Medicaid Plan
Complete overhaul to the Health Saving Account program (26 U.S.C. 923) to provide consumer-driven healthcare.
1.) Universal Access: Allow all individuals to have tax-deductible Health Savings Accounts, not just those with “high deductible” health insurance. Require those states receiving Medicaid to forego taxing HSAs.
2.) Amend HSA Contribution Limits:
a. Eliminate contribution limits for those with no insurance, those with high deductible health insurance plans, those with pre-existing conditions or other high-risks, and those with spouses or dependents with pre-existing conditions or other health risks.
i. To prove someone has a pre-existing condition or other qualifying health risk, an individual must provide a letter of being denied coverage from a health insurance company for such condition or health risk, or proof of having previously been a member of a high-risk pool in a State prior to the enactment of the ACA
b. Raise the tax-exempt individual contribution limits for those that don’t fall under (2)(a) to:
i. $7,500 for single coverage
ii. $15,000 for married couples + $5000 per dependent
iii. Credit these individuals with higher tax-deductible contribution limits if any portion of their HSAs are transferred to non-family members suffering from pre-existing conditions or other qualifying high-risk factors
c. Allow for complete roll-over of HSAs so accounts build indefinitely
d. Allow employers to contribute to an employee or independent contractor HSA, with these contributions being tax-deductible for the corporation.
e. Amend Flexible Spending Accounts (FSAs) contribution limits to allow up to $7,500 for single coverage, $15,000 for married + $5,000 per dependent for those with high deductible health insurance and allow these funds to carry over
f. Allow HSAs to be transferred/passed after death without penalty to anyone. FSAs may be transferred/passed after death, subject to traditional income taxation, unless the transfer is made to someone with a recognized pre-existing condition or other high-risk factor, in which case, it is converted into a tax-exempt HSA.
3.) Medicaid HSAs: (Modeled after former Indiana Governors Mitch Daniels and Mike Pence’s reforms to Medicaid HSAs)
a. End the Affordable Care Act’s Medicaid expansion coverage of those earning 100-138% of the federal poverty level effective December 31, 2017, but for those individuals that choose to receive direct deposit into an HSA.
b. Require states receiving Medicaid to permit, but not require, Medicaid enrollees to receive 5% of the average federal Medicaid cost for a similarly situated individual (i.e. aged, blind and disabled, children, and adults) as a direct deposit into an HSA (to be matched by states seeking coverage for those above the poverty line) and permit Medicaid recipients to use these funds to serve as co-pays, deductibles, to purchase insurance on the market, or roll-over to the following year as time goes on.
i. The following amounts will be distributed via direct deposit at the beginning of the Fiscal Year into a Medicaid qualified recipient’s HSA. State’s that want expansion to cover those 100-138% of the federal poverty level must be willing to match this amount:
A. Aged: $400
B. Blind/Disabled: $600
C. Children: $100
D. Adults: $230
ii. In the case of an individual who receives their annual Medicaid deposit (above) and such individual incurs costs for health services beyond the amount in the individual’s HSA, Medicaid shall reimburse the healthcare provider for such costs up to the amount that Medicaid would otherwise cover for that individual.
iii. Those who are at 50-100% of the federal poverty level must allocate 1% of their income to their HSA or lose dental, vision, or other coverage previously provided by ACA expansion.
iv. Those who are 100-138% of the federal poverty level must allocate a minimum of 2% of their income to their HSA or lose coverage altogether and they must allocate 4% or lose the expansionary coverage (dental, vision, etc.). These individuals must also pay a co-pay for unnecessary ER visits out of pocket.
c. Allow those with Medicaid funds in their HSA to maintain those direct deposited funds once they no longer qualify for Medicaid.
4.) Use of funds, HSA Restrictions & Penalties
a. HSAs Generally:
i. HSA funds may be used for deductibles, regardless of the source of funds (personal contribution, employer contribution, Medicaid, etc.) and regardless of insurance plan (high deductible, traditional plan, etc.)
ii. Those with Medicaid, and those with HSA’s having 4x their deductible in their account, may use funds for premiums and other expenditures (listed below in 4(a)(iv)); those with 6x their deductible in their account may use funds for other expenditures listed below in 4(b))
iii. Those with pre-existing conditions or other high-risk factors may receive transfers to their HSAs from family and non-family members having HSAs, without either party receiving penalty or taxation
iv. Permit the use of HSA funds for dental, vision, and chiropractic care; for durable medical equipment such as eyeglasses and hearing aids; for addiction treatment (incorporate the text of Congressman MacArthur’s current HR 1575); and for contraceptives (whether prescription or over-the-counter to incorporate Congresswoman Love’s current HR 421)
v. Monthly penalty for failure to have insurance coverage: temporarily eliminates the tax-haven status by assessing a per-month penalty at the rate of 15% of the value of the HSA, divided by 12 (to reflect the monthly application). For those on Medicaid that have failed to enroll, their accounts will be subject to the same penalty, to be taken out of the HSA deposit retroactively.
vi. Implements a 20% tax on the interest accrued on HSA investment accounts, with that money being directly used for Medicaid.
vii. Medicaid funds must remain limited in use for qualifying medical procedures, those costs listed in 4(a)(iv), and prescription drugs. This remains applicable to those funds that remain in an HSA after an account holder no longer qualifies for Medicaid.
viii. Those receiving Medicaid are subject to a $150 penalty or 10% fee, whichever is lower, from their account if they do not comply with annual check-up requirements. Fees collected going to Patient-Centered Medical Home programs (PCMH).
b. For those without Medicaid, HSAs remain untaxed if used for qualifying health-wellness programs, preventative care, and over-the-counter medicines. Use of an HSA for cosmetic or unnecessary procedures will be subject to income taxation on those funds.
C. Eliminate All Mandates & Essential benefit requirements (except for the bar against rescission)
1.) Insurance Incentive: Eliminate the Guaranteed Issue & Replace with Tax Reform Measures To Incentivize Coverage
a. Lower corporate income tax rate from 35% to 25% for those insurance companies that choose to participate in separate tax structure and agree to:
i. Provide full access to coverage for those with pre-existing conditions or other high risk factors
ii. Provide the essential benefit requirements previously offered under the ACA
iii. Keep those under the age of 26 on their parents’ plans
iv. Not charge rates above ACA ratio for those with high-risk factors
v. Not to have annual or lifetime caps on coverage
b. Provide insurance companies with reimbursement for the differences in the actual, higher costs of covering those with high-risk factors from those taxes collected from health insurance companies.
c. Maintain a prohibition on rescissions
2.) Allow individuals to purchase customizable plans with the only minimum requirement for a “health insurance plan” to be catastrophic insurance
D. Reform the Balanced Budget Act (BBA) of 1999 to eliminate the cap on medical residencies and incentivize private investment in the development of future doctors
1.) Eliminate the federal cap on medical residencies generally, so that there is no artificial barrier of supply, while maintaining a cap on the number residencies that receive federal subsidies
a. Significantly reduce federal expenditures to those seeking residencies in over-populated, well-served areas, sending federally subsidized residencies to the underserved areas of our nation
b. Incentivize private investment in residencies by making residency contributions by hospitals, insurance companies, and health care providers partially tax deductible
E. Repeal McCarran-Ferguson & lift the ban on Medicaid use at physician owned hospitals (already proposed legislation moving forward)