Earlier today, the House passed the American Health Care Act (AHCA) by a slim majority: 217 to 213. A chart reflecting the contents of the legislation is available below. The legislation will now go to the Senate where additional changes are expected in order to meet the reconciliation requirements of that chamber. NAHU supports some of the House's efforts to stabilize the market, such as through the creation of the Patient and State Stability Fund, establishing strong incentives for continuous coverage, allowing tax credits to be used for catastrophic coverage, expanding age rating bands and eliminating the Health Insurance Tax; however, we look forward to working with the Senate to provide thoughtful consideration of measures that can be incorporated into the AHCA to ensure the least amount of disruption to the market.
We will have a full review of the legislation in Friday's Washington Update. It is important to remember that this legislation is still pending, and has not been signed into law. At this time, the ACA and all of its regulations, penalties and enforcements is still the law, and compliance is still required. NAHU will continue to update you as this legislation moves through the political process to ensure your and your clients' compliance with the law.
SUMMARY OF MAJOR PROVISIONS
• Repeals ACA tax credit in 2020• Creates new tax credit adjusted by age ranging from $2000-$4000 available to those under $75,000/$150,000 in income• Repeals Small Business tax credit in 2020• Delays “Cadillac Tax” until 2025• Restores OTC drugs eligibility for HSA medical care expenses• Repeals tax increase on HSA non-qualified expenses• Repeals limit on FSA contributions• Reinstates employer deduction for Part D subsidy• Reinstates medical expense deduction to 7.5% threshold• Repeals Medicare wage surtax of 0.9 %• Increases HSA limits, allows spousal catch-up payments, and allows HSA payments for certain expenses incurred prior to establishment of HAS• Repeals tanning tax• Repeals net investment tax• Reinstates deduction for insurance executives• Repeals of on prescription drug manufacturers and importers• Repeal of health insurance tax• Repeals medical device tax
• Repeals enhanced match rate for expansion population after 2019
• Implements per-capita cap model in 2020 based on FY16 spending and indexed by medical CPI
• Repeals requirement that Medicaid plans must provide same “essential health benefits” as plans on the exchanges
• Repeals Medicaid DSH cuts for non-expansion states in 2018.
• Repeals Medicaid DSH cuts for expansion states in 2020
• Requires individuals to provide documentation of citizenship or lawful presence before obtaining Medicaid coverage.
• $10 billion to non-expansion states over 5 years for safety-net funding
• Increases frequency of eligibility redeterminations to every six months
• Repeals ACA presumptive eligibility for some beneficiaries
• Reverts mandatory income eligibility level for poverty-related children back to 100%
• Repeals 6%-point bonus in match rate for community- based attendant services and supports
III. MARKET REFORMS & STABILIZATION
• Provides $100 billion through 2026 for “Patient and State Stability Fund” to expand coverage,
increase insurance options, promote access to benefits, and reduce out-of- pocket spending
• Creates a continuous health insurance coverage incentive beginning in 2019 by allowing plans to
increase premiums by 30% for 12 months for anyone with a 63- day or more lapse in coverage
• Repeals insurance actuarial value standards
• Loosens age-rating requirements to a 5:1 federal standard and state flexibility to set
• Permits tax credits for
“catastrophic” and some off- exchange products
• Creates a Federal Invisible Risk Sharing Program and appropriates
$15B for years 2018 to 2016 to be used in addition to the Patient and State Stability Fund (Palmer)
• Waiver option for states to waive requirements of waive age ratio up to 5:1 in 2018; waive
continuous coverage charge and implement health status underwriting in 2019; and waive EHBs in 2020
and establish state standards (MacArthur)
• $8B for states that elect to use waiver under MacArthur Amendment for pre-existing conditions
• Repeals cost-sharing subsidies in 2020
• Recaptures excess subsidy Payments in 2018-2019
• Eliminates individual and employer mandate penalties