Following through on Republican campaign promises two key Congressional committees released legislation yesterday that further the process of repealing and replacing the Affordable Care Act. After more than 60 attempts to repeal the ACA since 2010, GOP members of the House Energy and Commerce and Ways and Means Committees released details of the “American Health Care Act.” Reaction to the AHCA has been swift and sharp portending a long road from producing legislation that can reach the President’s desk. On January 13, 2017, the House of Representatives passed budget resolution instructing the Energy and Commerce and Ways and Means Committees to draft legislation to repeal most of the ACA. The Energy and Commerce legislative recommendations are here and section-by-section is here. The Ways and Means Committee legislative recommendations are here and the section-by-section is here.
Key provisions from the Energy and Commerce recommendations include:
Medicaid expansion would be optional for states
Repealing the requirement that State Medicaid plans must provide the same “essential health benefits” that are required by plans on the exchanges, returning flexibility to the States on December 31, 2019
- Creation of a Patient and State Stability Fund to stabilize insurance markets. The fund would provide states $15 billion in 2018 and 2019 and $10 billion annually for 2020 through 2026. The fund can be used to provide coverage to high risk individuals, stabilize premiums, promote participation in state insurance markets and reduce cost sharing and premiums
- Creation of a Continuous Health Insurance Coverage Incentive which Benefit Year 2019, implements a 12-month look back period to assess whether an applicant went without coverage for greater than 63 days. If such a break in coverage occurred, there will be a flat 30 percent late-enrollment surcharge applied to their base premiums for 12 months.
Key provisions in the Ways and Means recommendations include:
- Creation of advanceable, refundable tax credits for the purchase of state-approved, major medical and COBRA coverage. The credits are means-tested and are available in full to single filers making $75,000 per year and $150,000 for joint filers. There is a $100 phase-down for each $1,000 in income above those thresholds
- Elimination of the individual and employer mandates. The effective date would be January 1, 2016, providing retroactive relief to those impacted by the penalty in 2016
- Delays implementation of the “Cadillac tax” until 2025
- Repeals the medical device tax and tax on brand pharmaceutical manufacturers
What’s next – the Energy and Commerce Committee has noticed its markup for March 8th as has the Ways and Means Committee. Once the committees have concluded their work, the legislation is sent to the House Budget Committee. Budget will combine the bills into a single reconciliation package which is expected the week of March 13th. That combined reconciliation bill would then move quickly to the House floor for a vote. In the Senate, Majority Leader Mitch McConnell (R-KY) has indicated that he would schedule time for consideration on the Senate floor the week of March 27th. Passage in the Senate only takes 51 votes. It’s important to note that after (if) the reconciliation bill is signed into law, there will likely be executive actions and additional legislation – which would require 60 votes – to finalize replacement.
While yesterday’s action amount to significant movement for the repeal and replace effort, much remains uncertain. House and Senate Democrats have panned the bills. The Congressional Budget Office has not released a budgetary score so its costs and savings are unknown. Moreover, some conservative groups are calling AHCA “Obamacare lite” and vow to release their own plans. We will be monitoring and reporting on events as they happen.