This page last updated on May 8th, 2017.
On May 4, 2017, the House of Representatives narrowly passed HR 1628, the American Health Care Act (AHCA) on a party-line vote.
Summary. The AHCA passed the House only; it has not yet passed the Senate, or been signed into law, and it does not repeal the Affordable Care Act (aka ACA, or “Obamacare”). Next steps: the Senate is likely to discard the House bill and begin from a blank slate on its own version of health care legislation. The Senate bill will have to limit itself to budget-related issues in order to pass on a party-line vote.
So, what actually passed? The version of the AHCA that eventually passed the House proposes major changes to Medicaid and to the private insurance market. On the Medicaid side, the AHCA would:
- phase out ACA provisions expanding Medicaid coverage for non-disabled adults;
- cut $880 billion in funding for Medicaid; and
- cap the federal government’s financial commitment to the Medicaid program.
With respect to private insurance, the AHCA would:
- repeal the ACA’s individual mandate, replacing it with a “continuous coverage requirement” (people with a break in insurance coverage could be charged higher premiums for one year);
- change the ACA’s premium structure and premium tax credits (allowing a wider differential between the premiums charged to younger vs. older people; varying the amount of premium tax credits by enrollee age, but not by enrollee income or the local cost of insurance);
- eliminate the ACA’s cost sharing subsidies;
- create a “Patient and State Stability Fund” to help with reinsurance and other initiatives, including high-risk pools, intended to stabilize state insurance markets;
- permit states to waive the ACA’s essential health benefits provision (insurance plans could be exempted from covering entire classes of benefits – hospitalization, maternity care, prescription drugs, etc. – or from covering specific benefits within those categories);
- [This waiver provision is especially far-reaching because key ACA financial protections – the ban on lifetime and annual caps, and the ceiling on yearly out-of-pocket spending – only apply to services and treatments that are categorized as essential health benefits]
- allow states to waive the ACA’s “community rating” provisions (a state could permit insurers to charge higher premiums based on health status to people with a gap in insurance coverage).
- While this provision technically preserves the ACA’s ban on pre-existing condition exclusions, it would also allow an insurer (depending on state law) to charge exorbitant premiums to high-cost individuals following a break in coverage.
- This section of the AHCA provides an additional $8 billion in “stabilization” funding over 5 years. States could use this money to fund high-risk pools – but based on pre-ACA experience, the funding provided would fall far short of the amount needed to support such pools.
The CBO did not have time to evaluate the amended version of the AHCA before the House vote. Despite the lack of a CBO “score” for the amended bill, and despite unified opposition from health and patient organizations, the AHCA passed by a vote of 217-213.
What’s next? Action now shifts to the Senate. Key Senators have indicated that they will begin work afresh, rather than building upon the AHCA as passed by the House. Thirteen Senators have been appointed to a health care working group. Their ranks span the Republican political spectrum: some of the members seek outright ACA repeal, while others have spoken up for the ACA’s Medicaid expansion. Any bill they produce will have to conform to Senate rules governing budget reconciliation legislation (these rules would preclude some of the provisions in the House-passed bill).
We will continue to update you as the Senate moves forward.