(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.

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.

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 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.

Representative Mark Walker, the chairman of the Republican Study Committee and critic of earlier drafts, said the bills move "in the right direction" and that his group’s steering committee will meet Tuesday evening to consider them (see Conservatives pan GOP Obamacare replacement plan as 'welfare').

“I applaud the movement and believe it is the right direction,” Walker, from North Carolina, said in an emailed statement. “We are carefully reviewing this legislation looking in three main areas of shared conservative concern: protection of the unborn, elimination of Obamacare’s Medicaid expansion and ensuring the tax credits are fiscally responsible.”

Republican Mark Meadows, also of North Carolina and chairman of the House Freedom Caucus, said they too will meet Tuesday to discuss the legislation.

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.

Republican Splits

The proposal released Monday night represents an attempt to appease different factions within the Republican Party. Democrats were excluded entirely from the bill’s drafting, and have complained that it was written in secret.

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.

Estimates of how many people would be covered under the Republican plan in comparison to Obamacare are not yet available.

“I don’t think it’s fair to want to compare what we’re proposing today to what Obamacare might have been,” White House budget director Mick Mulvaney told NBC News Tuesday morning. “You have to compare it to what Obamacare is. And it’s a failure. By that comparison, this new program is going to be a tremendous success.”

Under Obamacare, the proportion of Americans without health insurance fell to a record low in 2015. Just 10.5 percent of Americans younger than 65 lacked coverage, down from 18.2 percent in 2010, before the law’s coverage expansions began.

Members of the House Freedom Caucus and Kentucky Senator Rand Paul quickly voiced their objections to the Republican replacement bill, dismissing it as “Obamacare Lite” and not the fuller overhaul of federal health care law they believe is needed.

“It won’t work. Premiums and prices will continue to spiral out of control,” Paul said Tuesday on Fox News, adding on Twitter that the “House leadership plan” won’t pass.

Paul said he was heartened by Trump’s tweet that the bill was just a starting point for negotiations. “I think he’s open-minded on this” and realizes “conservatives have a lot of objections” to the House GOP bill, he said on Fox.

A staff analysis prepared for the Republican Study Committee, an influential group of House conservatives, called the refundable tax credits “a Republican welfare entitlement.”

But the committee’s chairman, Representative Mark Walker of North Carolina, who had criticized earlier drafts of the bill, said the legislation had moved "in the right direction" and that his group’s steering committee will meet Tuesday evening to consider the changes.

“We are carefully reviewing this legislation looking in three main areas of shared conservative concern: protection of the unborn, elimination of Obamacare’s Medicaid expansion and ensuring the tax credits are fiscally responsible,” Walker said in a statement.

Republican Mark Meadows, also of North Carolina and chairman of the House Freedom Caucus said they too will meet Tuesday to discuss the legislation.

One senior Republican suggested that under his party’s bill, Americans would have to pay a larger share of their own health care costs.

“Americans have choices, and they’ve got to make a choice,” Representative Jason Chaffetz of Utah, the chairman of the Oversight Committee, said on CNN Tuesday. “So rather than getting that new iPhone that they just love and want to go spend hundreds of dollars on that, maybe they should invest in their own health care.”

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.

-- Zachary Tracer, Anna Edney and Steven T. Dennis

Bloomberg News