American Health Care Act Passes House Vote

On Thursday, May 4, 2017, the Republican Party’s plan to repeal-and-replace the Affordable Care Act (“ACA”) took a step forward by passing a revised bill through the House of Representatives by a margin of 217 to 213 votes. Known as the American Health Care Act (“AHCA”), the bill repeals several of the core elements of the ACA. More specifically, the bill does the following:

  • Ends the tax penalty imposed on those without coverage;
  • Ends Medicaid expansion funding;
  • Allots fixed amounts of Medicaid money per person to states;
  • Replaces ACA cost-sharing subsidies with tax credits that grow with the insured’s age;
  • Repeals taxes on the wealthy, insurers, and drug/medical device makers;
  • Imposes a 30% premium surcharge when an individual’s coverage lapses for more than 63 days per year;
  • Allows states to waive certain requirements of the ACA, which would, for example, allow insurers to charge higher premiums to the elderly and people with pre-existing conditions;
  • Provides states with $8 billion spread over 5 years to finance high-risk/pre-existing condition pools;
  • Provides states with $130 billion over 10 years to help their citizens afford coverage; and
  • Retains the ACA rule that individuals may remain on parental insurance until age 26.

With a rushed vote on the updated bill, the Congressional Budget Office (“CBO”) was not afforded an opportunity to fully analyze it beforehand. However, before the most recent update, CBO analysis found that roughly 24 million more people would be uninsured under the bill within a decade. As written, the bill pulls substantial funding from Medicaid, including ending expansion after 2020.

Reminiscent of the bill’s failure to pass through the House just weeks ago, the AHCA awaits a tough test in the Senate. With Republicans only able to lose 2 Senate Republican votes for the bill to pass, and with some Senate Republicans insisting that they will draft their own bill from scratch, the chances of changes being made to the bill, and its subsequent return to the House, remain high.