National Aug 4, 2017
Update on federal health-care legislation
Republicans in the U.S. House of Representatives released proposed legislation intended to replace the Patient Protection and Affordable Care Act on March 6. The proposed American Health Care Act of 2017 was scheduled for a vote on March 24, 2017, but was pulled from consideration due to a lack of votes in the House.
The AHCA differed from the current PPACA in several key aspects. Most notably, the AHCA did not include an individual or employer mandate. Instead, carriers were permitted to impose a one-year, 30 percent surcharge on consumers that have a lapse in coverage. The AHCA would have changed the current income-based subsidies to an age-based refundable tax credit for premiums, which would have been phased out for higher premium and did not provide tax credits for out-of-pocket expenses. The AHCA would have allowed individuals and families to contribute more to a tax-free health savings account by increasing the limits to $6,550 and $13,100, respectively.
Some other highlights of the proposed legislation included repealing both the tax on investment income and the tax on individuals with an income greater than $200,000 and families with an income greater than $250,000. The AHCA also would have required private plans to offer the 10 essential health benefits outlined in the PPACA. The AHCA prohibited insurers from denying coverage due to a pre-existing condition and allowed dependents to stay on a health plan until the age of 26. The AHCA had also adopted the current "Cadillac tax," a 40 percent excise tax on so-called "overly generous" health insurance plans, included in the PPACA.
The House announced the AHCA had been amended in an effort to garner more support for the legislation on April 21. The "MacArthur Amendment" reinstated essential health benefits as the federal standard and created an option for states to obtain limited waivers from certain federal standards in the interest of lowering premium costs and expanding the number of insured persons. States could seek these waivers for essential health benefits and community-rating rules.
The proposal narrowly passed the House with a vote of 217 to 213 on May 4. The legislation was then passed on to the Senate, which attempted to modify it several times.
The Senate introduced several amendments, the last of which was a "skinny repeal" of the PPACA in July. This amendment was aimed at repealing some provisions of the PPACA while leaving the rest intact and would have allowed a full repeal and replacement proposal to come at a later time. The "skinny repeal" would have used the reconciliation method to repeal the individual and employer mandates, extended the current medical device tax suspension, increase health-savings-account contribution limits and provide $2 billion for state health-insurance risk programs and other market-stabilization efforts. The amendment went for a vote on July 28, but it failed to pass (49-51). Three key Republican senators crossed party lines in order to block the effort from passing the Senate.
The bill is now back on the Senate calendar and House Speaker Paul Ryan has issued a statement expressing the House’s willingness to create a working group with the Senate in an effort to come to a bipartisan agreement on how to proceed with health care.