Health Insurance Market Policy Activity in the 115th Congress

Rachel B. Morgan RN, BSN 5/9/2017

Highlights of H.R. 1628: The American Health Care Act of 2017 

On Thursday May 4, in a 217–213 vote, the U.S. House of Representatives approved H.R. 1628, the American Health Care Act of 2017 (AHCA). The health care package includes provisions that would repeal or modify parts of the Patient Protection and Affordable Care Act (ACA) including the cost-sharing subsidies for lower-income individuals to enable them to purchase health coverage on the exchanges. The AHCA substitutes the subsidies with a tax credit with different eligibility rules and calculating requirements. The bill fundamentally alters Medicaid financing mechanisms, and repeals the ACA Medicaid expansion options for states. The bill also includes provisions that do not specifically relate to aspects of the ACA, including late enrollment penalties for individuals who do not maintain health coverage, and a health insurance market stabilization fund.

The health package lost momentum in March because of disagreements between House GOP moderates and conservatives over differing opinions on how certain ACA provisions would be handled. Central to the divide were parts of the law that regulated community rating; governed premium rates or additional fees for individuals with chronic medical conditions or other characteristics such as age; the requirement that insurers cover those with pre-existing conditions; and whether to alter requirements on the 10 essential health benefits (EHBs) as outlined in the ACA provisions. The AHCA was revived after Republicans garnered support from conservative and moderate members with amendments aimed at EHBs and pre-existing conditions.

Amendments

The MacArthur amendment allows states to seek a limited waiver under which insurance companies in the individual market could charge higher premiums for a person with pre-existing health conditions if they do not maintain continuous coverage. The waiver would be conditional on the state establishing a high-risk pool. The Upton/Long amendment sets aside $8 billion to help lower premiums and other out-of-pocket costs for individuals with pre-existing conditions who do not maintain continuous coverage and live in states that request and receive a waiver. Some moderates had expressed concern over the lack of protection in the bill for those with pre-existing conditions agreed to support the measure because of the amendment.

Medicaid Financing

Key provisions pertaining to Medicaid convert the financing to a per-capita-cap model starting in fiscal year (FY) 2020, and provide states the option to receive block grant funding instead of per-capita-cap for nonelderly, nondisabled, nonexpansion adults and children starting in FY2020. The Congressional Budget Office has not yet published its estimate of the House approved provisions that incorporate all the amendments, but the most recent cost estimates report that the AHCA would reduce federal deficits by $150 billion over the FY2017-FY2026 period. Conversely, its effect on health insurance coverage in FY2018 estimate that 14 million more people would be uninsured and, in FY2026, 24 million more people would be uninsured than under current law.

Attention now turns to the Senate. Without a Democratic support or a filibuster-proof majority, Senate Republicans would have to pass the measure through budget reconciliation, which requires only a 51-vote majority but is limited to budget-related matters. Some provisions of the AHCA may not clear this hurdle. Some Senators have indicated that they will start from scratch in crafting their own repeal and replace legislation.

Additional Resources

NCSL Summary of H.R. 1628, The American Health Care Act of 2017

Congressional Research Service Report: H.R. 1628: The American Health Care Act (AHCA)

 

FY 2017 Budget Resolution, S. Con. Res. 3

The 115th Congress made initial steps toward repealing and replacing the Affordable Care Act (ACA) the week of Jan. 13 with its approval of S. Con Res. 3, the reconciliation budget for 2017 that funds the government into March and directs certain Senate and House committees to each find at least $1 billion in cost cutting over ten years with the aim of dismantling parts of the health law.

It establishes a reserve fund that permits the Budget Committee Chairs to adjust the levels in the budget resolution for health care legislation, including legislation that repeals the ACA and makes other health care reforms. The resolution includes:

  • Reconciliation instructions to authorizing committees so that repeal legislation can move through a fast-track process and can pass with only a simple majority in the Senate, as in the House. These instructions to committees are provided to facilitate immediate action on repeal, with the intent of sending legislation to the new President’s desk as soon as possible.
  • Reconciliation instructions to four authorizing committees – Ways and Means and Energy and Commerce in the House, Finance and Health, Education, Labor, and Pensions in the Senate – to achieve at least $1 billion each in deficit reduction over 10 years (fiscal years 2017 through 2026).
  • Direction to the authorizing committees to report legislation to their Budget Committee by January 27, 2017. The legislation will be combined for consideration on the floors of the respective Chambers.
  • Reserve funds necessary to accommodate legislation to repeal the ACA. Following the ACA repeal legislation, Congress will then begin its work on a fiscal year 2018 budget resolution, which will include broader policy reforms and a comprehensive plan to achieve long-term fiscal sustainability.