Healthcare.gov Could Be Crippled Under Latest GOP Obamacare Repeal Proposal

The federal exchange marketplace would remain under the proposal, but largely in name only

Sen. Ron Johnson, R-Wis., is part of a group sponsoring legislation that would dismantle current health care law, including a key mechanism for determining people's eligibility for subsidies. (Tom Williams/CQ Roll Call)

A federal health exchange the government spent over $1 billion to create would likely be made obsolete by the recent GOP proposal to gut the 2010 health law.

Policy experts say the Department of Health and Human Services would still be required to maintain healthcare.gov under the proposal from Republican Sens. Bill Cassidy of Louisiana, Lindsey Graham of South Carolina, Ron Johnson of Wisconsin and Dean Heller of Nevada. 

But the bill would axe a provision in the current law that addresses the website’s role in determining eligibility for insurance subsidies. The removal of that provision, experts say, would likely prevent any state from utilizing it for the purposes of operating their own insurance exchange.  

It is unclear though exactly what impact the bill have on healthcare.gov specifically. Several aides and policy analysts said there is still confusion over several provisions of the overall proposal. 

Spokespersons for Cassidy and Graham did not respond to questions about the bill’s impact on the federal platform. 

The health law required HHS to create what is now known as healthcare.gov, an online platform to allow most consumers to purchase insurance in states that did not opt to create their own exchange marketplace.

The website plays a critical role in administering the law. It is the portal that many consumers use to purchase insurance plans and calculate the amount of subsidies he or she would qualify for.  

The office of inspector general at HHS previously estimated that the federal government has issued grants totaling $1.7 billion to develop and operate the marketplace. The Centers for Medicare and Medicaid Services has spent $500 million so far, the report said. 

In 2014, former HHS Secretary Sylvia Burwell told senators the agency had spent nearly $1 billion on the website that year alone. 

While the recent proposal from the GOP quartet would drastically upend much of the current law, health policy experts say states could still utilize the healthcare.gov platform under the bill.

“The requirement on HHS to maintain healthcare.gov would remain, and presumably if a state wanted to funnel their block grant/subsidy funds through the exchanges … they could do so,” Chris Jacobs, founder and chief executive officer of Juniper Research Group, said over email on Thursday.

But Tim Jost, emeritus professor at the Washington and Lee University School of Law, said the legislation would repeal the measures in the current law that address healthcare.gov’s role in determining eligibility for tax credits, effectively preventing states from routing consumers to the platform.   

That verification system is vital to the current law, and the federal government spent upwards of $73 million developing it, according to the HHS report. 

There are several other important features of healthcare.gov the government has spent millions of dollars developing — like mechanisms to secure Social Security numbers and other personal information provided by users. 

The onus could now be transferred to the states to create those systems themselves should they choose to create their own insurance exchange. It is considered unlikely that every state would choose to create their own online marketplace and some are expected to instead spend the money on programs like high-risk pools.

But there have been concerns raised over whether there would ample time or resources necessary for states to build their own exchange from scratch if they so choose in the two years allotted before the legislation kicks in in 2020.   

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