American Health Care Act of 2017

Official Title: To provide for reconciliation pursuant to title II of the concurrent resolution on the budget for fiscal year 2017.

HR 1628: American Health Care Act of 2017 (AHCA)
Passed by House on May 4, 2017, 217-213 (1 not voting)

History: The AHCA was introduced by House Republicans on March 6, 2017 as a combination of bills drafted by the House Ways and Means Committee (text; summary) and the House Energy and Commerce Committee (text; summary).

After gaining approval in the committees, the bill was altered on March 20 by a Manager's Amendment which included technical changes (text; summary) and policy changes (text; summary)

The bill was scheduled for a full vote in the House of Representatives on March 24, but was pulled at the last minute, after hours of debate, when it was evident that there wasn't enough Republican support to pass it. (All Democrats in the House were opposed to it from the start.)

The following week, the bill was back under consideration. On April 6, an amendment (text; summary) was added to create an "invisible risk sharing program," funded with $15 billion over nine years.

On April 25, Rep. Tom MacArthur (R-New Jersey) introduced the MacArthur Amendment (text; summary) which allows states to seek waivers to alter various ACA consumer protections, including community rating, essential health benefits, and age band ratios. This amendment garnered the support of the ultra-conservative House Freedom Caucus, but moderate Republicans were concerns about the impact on people with pre-existing conditions.

On May 3 (the day before the House voted on the AHCA), Rep. Fred Upton (R-Michigan) introduced the Upton Amendment (text; summary). The amendment provides $8 billion over five years, to offset the higher "premiums or other out-of-pocket costs" that people would experience in waiver states if they have pre-existing conditions and a gap in coverage. With this amendment, House leadership was able to get just barely enough support to pass the bill.

The bill passed the House on May 4, by a vote of 217 to 213. It needed 216 votes to pass, so it was a razor-thin margin.

The bill now heads to the Senate, but the Senate has indicated that it will write its own legislation, attempting to incorporate as much of the House bill as possible.

A reconciliation bill can pass in the Senate with 51 votes, one of which can be a tie-breaker vote cast by the Vice President. There are 52 Republicans in the Senate, so if more than two of them oppose the AHCA – or the Senate's version – it will not pass.

Synopsis: Republicans in Congress have been working to repeal the ACA ever since it was signed into law in 2010. The AHCA is a reconciliation bill designed to repeal spending-related provisions of the ACA and replace some of them with Republican alternatives.

A reconciliation bill is not subject to filibuster, and can thus pass with a simple majority in the Senate. But reconciliation legislation can only address provisions that directly impact the federal budget. So full repeal of the ACA is not possible with a reconciliation bill (that could only be done with a bill that would need 60 votes in the Senate to overcome a filibuster). But the law's spending-related provisions can be repealed or changed via reconciliation.

H.R.1628 is the result of S.Con.Res.3 , which passed in January and directed Congressional committees to draft reconciliation legislation to repeal spending-related provisions of the ACA.

To be clear, the AHCA does not repeal most of the ACA:

• Coverage would still be guaranteed-issue. Applications could not be denied altogether, but in states that seek a waiver, premiums could be higher (for 12 months) for people with pre-existing conditions and a gap in coverage . In states that don't seek a waiver, premiums would be 30 percent higher (for 12 months) for anyone with a gap in coverage, regardless of medical history.
• Lifetime and annual benefit maximums would still be prohibitedbut only for essential health benefits (as is true under the ACA), and essential health benefits could change in states that seek a waiver.
• All plans would still have to cover essential health benefitsbut in states that seek a waiver, the services that are considered essential health benefits could change.
• Limits on annual in-network out-of-pocket costs would still apply, but again, this is only the case for essential health benefits, which could change in some states.
• Young adults would still be able to remain on a parent's health plan until age 26.
• Health insurance exchanges, open enrollment periods, and special enrollment periods would all remain in place.
• Provisions that impact Medicare, such as closing the Part D donut hole, and adding preventive care benefits, are not changed. However, the ACA's taxes that provide funding for Medicare are eliminated, which will result in insolvency for Medicare's trust fund approximately three years sooner than under the ACA.

• Community rating. In states that seek a waiver, insurers would be able to charge higher individual market premiums based on an applicant's medical history, if the applicant had a gap in coverage of at least 63 days in the previous year.
• Essential health benefits. In states that seek a waiver, the services that are considered essential health benefits could be redefined. Since the ACA's ban on lifetime and annual benefit caps only applies to essential health benefits, as does the limitation on out-of-pocket costs, those protections would be weakened.
• Age band ratios. The ACA limits premiums for older enrollees to three times those of younger enrollees. The AHCA allows that ratio to be 5:1, but states can seek waiver to further increase the ratio. Higher age band ratios mean higher premiums for older enrollees (age 50-64) and lower premiums for people in their 20s.

• The individual mandate penalty and employer mandate penalty would be eliminated, retroactively to the beginning of 2016.
• The Cadillac tax, currently scheduled to take effect in 2020, would be postponed until 2026.
• Various other ACA taxes are repealed, including the 3.8 percent capital gains tax and the 0.9 percent Medicare tax on high-income filers, the tanning bed tax, the taxes on health insurers and pharmaceutical manufacturers, and the medical device tax.
• ACA premium tax credits would be modified in 2018/2019 (increased for younger people, decreased for older people, and made available for off-exchange plans and catastrophic plans)
• ACA tax credits would be replaced as of 2020. The new tax credits would be available in full to people with income up to $75,000 ($150,000 for a married couple) and would be phased out for incomes above that level. Otherwise, the tax credits would only vary based on age. They would not be larger for lower-income people or for people in areas where health insurance is more expensive (as is the case with ACA tax credits). Overall, the tax credits would be smaller than the ACA's tax credits, although people with income above 400 percent of the poverty level - who do not receive any premium tax credits under the ACA - would be eligible to receive them. This interactive map shows how they would work.
• After the 2018 open enrollment period (November 1, 2017 to December 15, 2017), people who enroll in individual market plans following a gap in coverage of at least 63 days within the previous 12 months would be subject to a 30 percent premium increase for the duration of the plan year. Alternatively, states could opt for a waiver that would allow for higher premiums based on medical underwriting (ie, they would only apply to people with pre-existing conditions) for people who had experienced a gap in coverage.
• The AHCA provides $100 billion over 9 years for a Patient and State Stability Fund, $15 billion over nine years for an "invisible risk sharing program" and $8 billion over five years to offset the higher premiums people with pre-existing conditions would pay in states that allow medical underwriting for people with a gap in coverage.
• Federal funding for Planned Parenthood would be prohibited for one year.
• States that choose to expand Medicaid after March 1, 2017 would only be able to get their regular federal Medicaid funding match; they would not be eligible for the 95 percent federal funding that they would have received (from 2017 through 2019) under the ACA, or the 90 percent federal funding thereafter.
• In states that have already expanded Medicaid, ACA Medicaid expansion funding would continue (along with continued enrollment) through the end of 2019. After that, no new enrollments at the higher federal match would be allowed, and people already enrolled would only continue to be funded at the ACA level if they remained continuously enrolled.
• Federal Medicaid funding would be converted to a per-capita allotment as of 2020. States would also have the option to receive a block grant for their non-expansion population.
• HSA contribution limits would be increased, as of 2018, to equal the maximum allowable out-of-pocket exposure on HSA-qualified plans (that amount is indexed for inflation; in 2017, it's $6,550 for individual coverage and $13,100 for family coverage).

Why supporters pushed for this bill

• Republican lawmakers have wanted to repeal the ACA for seven years. Many current Republicans in Congress campaigned on a promise to repeal the ACA, and H.R.1628 gives them an opportunity to make good on that promise, to some degree.
• Although the legislation only repeals some parts of the ACA, it repeals the parts that are most hated by conservatives: the individual and employer mandate penalties, and the law's various taxes. It also changes Medicaid to reduce federal spending, which tends to appeal to conservatives.
• The CBO projects that the AHCA would lower the federal deficits by $337 billion over the next decade.

Why opponents tried to stop the bill

• Democrats have long supported the ACA, and continue to reiterate the many ways that it's helping Americans, including the fact that the uninsured rate is at an all-time low .
• Some conservative Republicans are opposed to the AHCA because they feel that it doesn't go far enough in terms of repealing the ACA.
• The Congressional Budget Office scored the AHCA on March 13 (prior to the Manager's Amendment and any changes that were made late in the day on March 22). At that point their projection was the the uninsured population would increase by 24 million people over the next decade if the AHCA were to be implemented. Their score after accounting for the Manager's Amendment still projected 24 million fewer people with health insurance.
• The CBO had not yet scored the later amendments by the time the House voted to pass the AHCA. As such, lawmakers were voting on a bill without a clear understanding of its impact.
• There are concerns that the AHCA could destabilize the individual health insurance market for 2018. If the individual mandate is repealed retroactive to 2016, the CBO predicts that 4 million people would drop their coverage in mid-2017. Half of them are in the individual market, which would result in a sicker risk pool and claims costs being spread across a smaller insured population. The result could be more insurer exits from the individual market at the end of 2017. The CBO also predicts that premiums will rise by 15 to 20 percent in 2018 and 2019 if the AHCA is enacted.
• The premium tax credits will extend further into the middle-class and upper-middle-class under the AHCA, but that will come at the expense of older and lower-income Americans.
• Ending new Medicaid expansion enrollments after 2019 and converting federal Medicaid funding to a per-capita allotment would save the government money, but it would result in a lot of low-income people becoming uninsured. The CBO projects that 14 million fewer people would be enrolled in Medicaid by 2024 if the AHCA is enacted. Given the relatively small size of the AHCA tax credits, it's unlikely that many people who lose Medicaid will be able to purchase other coverage as a replacement.
• Essentially, the AHCA provides a large tax break to the wealthiest Americans, while making health insurance unaffordable for people with low incomes and people over the age of 50 with low or modest incomes.

More: select a member to see his or her other key health care votes.