2017 Health Care Reform Update Log

This timeline notes the substantive developments in health care reform under the Trump administration. It is updated regularly, so you don’t miss a beat.

December 20, 2017
Approved Tax Bill Includes Individual Mandate Repeal
On Wednesday, December 20, Republicans in the House and Senate passed a tax bill to be signed into law by the President* that, among provisions to change tax brackets and deductions for consumers and corporations, also reduces the individual shared responsibility penalty to $0. By doing so, the coverage requirement of the Affordable Care Act (ACA) that consumers purchase health insurance coverage or pay a penalty becomes toothless.

As previously noted, the Congressional Budget Office estimates the “individual mandate repeal” would cause an additional 13 million people to go uninsured over the next 10 years and premiums of private insurance to increase by about 10% because healthier people would leave the market, driving up the cost of health care. The repeal would also mean that over $300 billion currently spent in government insurance subsidies would be saved over the next decade.

The repeal will not go into effect until 2019, which will give lawmakers some time to help mitigate adverse consequences (such as the increase in health care costs and the number of uninsured Americans) before the repeal goes into effect.

In the absence of the individual mandate penalty, it is likely that more employees will opt out of employer-sponsored health coverage. However, this will not affect the obligations eligible employers have under the ACA as those provisions will remain in force, including the requirement that employers offer affordable health care coverage or pay a tax (the employer mandate) and that eligible employers report specific coverage information to its employees and the Internal Revenue Service or pay related penalties.

A separate vote on ACA stabilization bills consisting of restoring cost-sharing payments to insurance companies, reforming the state waiver process, and creating a federal reinsurance pool, will likely be postponed to 2018.

*The President signed the bill into law on Friday, December 22.

November 15, 2017
Senate Tax Bill Includes Individual Mandate Repeal
A revised version of the tax bill drafted by Senate Republican leaders includes the repeal of the Affordable Care Act (ACA) individual mandate. If passed, it would mean that penalties would be reduced to $0 for Americans who don’t buy health insurance. The Congressional Budget Office estimates that the repeal would cause an additional 13 million people to be uninsured over the next 10 years and premiums of private insurance could increase by about 10% because healthier people would leave the market.

The repeal would also mean that over $300 billion currently spent in government insurance subsidies would be saved over the next decade. Yet Republican Senators are still grappling with whether the money should be used to support tax cuts for the wealthy, middle class, corporations or a combination thereof. Additionally, less conservative Republicans are not keen on seeing efforts to roll back the ACA incorporated in the tax bill. There are also talks of including a bipartisan health care provision in the bill.

Meanwhile in the House, Republican leaders are considering including the mandate repeal in their own tax plan. Both bills are expected to be voted on in the coming days. *The bills must be identical and result in a reconciled bill before the President can sign the bill into law. To see the steps needed for a bill to become a law, read our Q&A The ACA & Health Care Reform.

*Update: On November 16, the House approved it’s version of the tax bill.

October 27, 2017
Proposal to Give States More Power Over Health Plan Coverage Requirements
The Centers for Medicare & Medicaid Services (CMS) proposed a rule that would enhance the roles of states as related to defining essential health benefits and certifying qualified health plans. In essence: States would have more control over their own coverage requirements and federal oversight would significantly diminish. The proposal, among other items, would also allow states to apply for a change in their respective medical loss ratio (MLR), which is currently mandated at 80%. Comments on the proposal are being accepted through November 27, 2017.

October 25, 2017
States’ Request to Block CSR Cut Off Is Rejected in Court
Shortly after the President’s announcement that he would cut off cost sharing reduction (CSR) payments to insurers, the attorneys general of 18 states and the District of Columbia filed a lawsuit against the administration, claiming that the action is illegal and part of a concerted effort to cause the ACA to implode, and not a good faith interpretation of the law. On October 25, a federal judge rejected the bid, claiming that an emergency order reinstating the payments was not necessary and that most states had enough time to adjust premiums accordingly. An appeal of the ruling is anticipated.

October 12
President Trump’s Executive Order Expanding Use of AHPs, STLDI Plans and HRAs
President Trump issued an executive order that directs governmental regulators to consider issuing rules expanding:

(1) Access to Association Health Plans (AHPs). These are plans that allow small employers to band together and offer group coverage on a combined basis (either through self-insurance or otherwise). These plans would not be subject to certain Affordable Care Act mandates and could be of interest to small employers due to potentially lower premiums, if rules are proposed and implemented;

(2) Coverage Through Low Cost Short-Term Limited Duration Insurance (STLDI) Plans. These are a type of “skinny” plan designed to fill temporary gaps in coverage when an individual is transitioning from one plan to another. This type of insurance is exempt from certain consumer protections of the ACA and can only cover an individual for up to 3 months. New rules may expand the period of time that an individual can be on STLDI. The use of these plans may be of interest to younger and healthier individuals; and

(3) Use of Health Reimbursement Accounts (HRAs). This is a type of arrangement that allows an employer to provide tax-free funds to employees to pay for certain healthcare costs. The order directs the agencies to increase the usability of HRAs with non-group coverage. If this change is implemented, it can potentially have an effect on the mid- to large-sized employer market, as employers may see value in utilizing HRA’s to encourage certain employees to obtain coverage outside of its group health plan.

This Order does not mandate the enactment of any particular regulations, so it is not likely to immediately impact the insurance market nor employer health care benefits. However, the Order could have a more significant impact if and when rules get developed, as noted above.

President Trump Declares End to CSR Payments
On Thursday, October 12, President Trump said that the administration will no longer be making cost-sharing reduction (CSR) payments to insurers. These payments are used to offset the medical costs of low-income consumers who purchase Silver-level plans on the exchange. About 6 million people or 57 percent of people enrolled in exchange plans benefit from CSRs. The CSR cut-off comes shortly before open enrollment will begin and may damage the individual market.

Since President Trump took office, the uncertain future of CSR payments caused some states to allow insurers to increase their rates in 2018. In other states, insurers held back on increasing premiums, believing that the subsidies would be paid out in 2018. Now, these states may allow insurers to increase their premiums to make up for the subsidy loss—by as much as an additional 20 percent, according to the Congressional Budget Office (CBO). In a third scenario, insurers are pulling out of the exchange market altogether in various states.

Currently, 84 percent of marketplace enrollees receive advance premium tax credits (APTCs) by the federal government to help lower their monthly premiums. Ironically, because premiums for plans may increase, the federal government would increase the amount it pays in tax credits to offset the premium increases. The CBO estimates that in the first year CSR payments are terminated, the federal deficit will increase by $6 billion as a result of an increase in tax credit payments. Even so, not everyone currently in a CSR-subsidized plan qualifies for tax credits, so a portion of affected consumers will still pay higher premiums in order to maintain the same coverage through their exchange plan.

The Centers for Medicare and Medicaid Services (CMS) has already permitted insurers to delay notifying consumers of 2018 rates beyond the original October 31, 2017 date. As insurers adjust rates to account for the cut-off of CSR payments, it is likely that consumers will not have information on 2018 rates until days into the open enrollment period.

Meanwhile, a court decision still hasn’t been reached in the ongoing lawsuit House v. Price – where the legality of CSR payments (and the related concerns of 17 states) are being considered. (See our previous postings of August 1 and May 22.) Additionally, since the announcement of the cut-off of CSR payments, the attorneys general of 18 states and the District of Columbia have raised a separate action, claiming that the Trump administration’s cut-off of CSR payments is illegal and part of a concerted effort to cause the ACA to implode, and not a good faith interpretation of the law.

On Monday, October 16, President Trump agreed to consider supporting a bipartisan health care bill that is being proposed by the Senate. The bill intends to keep CSR payments in place while adding assurances that the money will be passed to consumers, not be kept by insurers. The bill will still need to be considered and put to a vote by both chambers of Congress.

October 6
Administration expands exemption from contraception coverage.
On October 6, Health and Human Services (HHS) expanded the types of employers and insurers that could exempt themselves from covering contraceptives by claiming religious or moral objections. This is one example of how the administration can perform administrative actions to dismantle parts of the Affordable Care Act (ACA) without requiring Congressional approval.

October 4, 2017
Children’s Health Insurance Program is funded for 5 more years.
Having focused their efforts on repealing the Affordable Care Act (ACA), Congress let federal funding for the Children’s Health Insurance Program (CHIP) expire on September 30. However, on October 4, the Senate Finance Committee reauthorized funding of the program for another 5 years.

Signed into law in 1997, this program insures pregnant women and children of families who make too much to qualify for Medicaid and not enough to afford private insurance. In fiscal year 2016, 8.9 million children are covered by CHIP. The program is administered by states and funded jointly by states and the federal government.

Federal funding will continue to be extended through the Senate’s Keep Kids’ Insurance Dependable and Secure (KIDS) Act. However, the ACA provision that increased the Enhanced Federal Medical Assistance Percentage (E-FMAP) by an additional 23 percentage points will be tapered off and ultimately eliminated by 2021. Before the ACA provision was in place, the CHIP E-FMAP was already 15 percentage points higher than the traditional Medicaid rate.

CHIP was extended without any additional changes in order to secure an expeditious decision, before the Congressional recess of October 9. Any objections and proposed amendments from senators (particularly how to offset funds and prevent funds from being redirected to nonrelated programs) will have to be reviewed later.

Additionally, funding for the nation’s 1,400 community health centers, which operate in more than 9,500 locations and serve 27 million people, also expired on September 30. Congress may still vote on reauthorizing this funding before they go on recess later this week.

September 26, 2017
CHRONIC Care Act for Medicare passes the Senate.
Introduced in the Senate in April, the bipartisan bill cited as the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017 was passed unanimously by the Senate on September 26, and was referred to the House for their vote. By amending title XVIII (Medicare) of the Social Security Act, the legislation aims to implement Medicare payment policies designed to improve the management of chronic disease, streamline care coordination, and improve quality outcomes without adding to the deficit.

September 26, 2017
Fast Track ACA Repeal Wilts Away
Never having made it to the voting floor, the ACA repeal bill proposed by Senate Republicans on September 13 seems to have come to a quick death on Monday, September 26. To survive, the bill could only afford to lose 2 Republican senators to a “No.” But over the course of the past few days, 3 Republicans dissented: Susan Collins of Maine, Rand Paul of Kentucky and John McCain of Arizona.

This comes after the Congressional Budget Office–not able to give an actual number due to lack of time to perform a proper analysis—estimated that “the number of people with comprehensive health insurance that covers high-cost medical events would be reduced by millions” under this proposed bill.

This likely draws to an end the efforts of a fast track, budget reconciliation repeal. Now, unless the Republicans use the budget reconciliation process anew (which allows them to pass legislation based on a simple majority), they will need to take a bipartisan approach to pass changes to the health care law.

Meanwhile, the Sanders Medicare-for-all bill and the blueprint proposed by a group of bipartisan governors are still up for consideration.

September 18, 2017
What’s Going On in Health Care Reform
Lawmakers are still actively pursuing solutions to stabilize health insurance costs in the U.S. Here’s what’s been going on:

A bipartisan blueprint from 8 governors: On Thursday, August 31, a group of 8 governors released their plan for stabilizing the Affordable Care Act marketplaces. Among their recommendations are: the continued funding of cost-sharing reductions, keeping the individual mandate in place (at least for the near future), the ability to consider alternative approaches to the 10 essential benefits and a call for partnership at the federal and state levels.

Four hearings by the Senate: During September, the Senate health committee is holding four hearings to discuss stabilizing premiums and helping individuals in the individual insurance market. The hearings include testimony from governors, insurance commissioners and stakeholders.

Senate Republicans still hoping for a fast track repeal: Another ACA repeal bill was issued by Senate Republicans on Wednesday, September 13. The ability to issue a reconciliation (or budget) bill based on the current budget resolution expires at the end of September. Senators Lindsey Graham, Bill Cassidy, Dean Heller and Ron Johnson are hoping to have their bill reviewed, rewritten and approved by the Senate within that narrow window of time.

The revival of the single-payer system debate: Bernie Sanders released his Medicare-for-all bill on Wednesday, September 13. This would mean that payment of medical bills would come from one entity (the government) and would be paid for in the form of taxes, rather than from the consumer in the form of payroll deductions and disposable income. The proposal also calls for lowering the eligibility age over time until all Americans are covered, providing more generous coverage and removing private insurers from the Medicare system. A growing number of democrats have already shown their support of the Sanders bill, including Senators Elizabeth Warren of Massachusetts, Kamala Harris of California and Cory Booker of New Jersey.

August 1, 2017
The Ongoing Case of CSR Payments
In the ongoing lawsuit United States House of Representatives v. Price, et al, filed in 2014, the House is suing departments in the executive branch for implementing cost sharing reduction (CSR) payments to insurers.

CSR payments were implemented as part of the Affordable Care Act (ACA) to keep costs down for consumers in exchange plans. The federal government reimburses insurers for the costs they incur in providing a discount to low-income Americans (through the “Silver”-level plans on the exchanges).

The House argues that these payments are illegal because Congress had not appropriated funding for the payments. In 2016, the judge ruled in favor of the House in respect to this particular point, and the ruling went up for appeal by the Obama administration.

Additionally, concerned that President Trump would unilaterally suspend CSR payments, 17 states requested to intervene in the case, and on August 1, 2017, they were granted the motion. Their main premise: Trump does not have their best interests in mind and they would suffer “concrete harm” should the House win the case.

It’s yet to be seen whether President Trump unilaterally will end CSR payments before a court decision is reached.

July 28, 2017
Skinny Repeal is Voted Down
On July 27, with a vote of 51-49, the Senate’s bill to partially repeal the Affordable Care Act (ACA) was voted down. Along with all the Democrats, Republicans John McCain, Susan Collins, and Lisa Murkowski gave the “skinny repeal” bill—officially called the Health Care Freedom Act—a thumbs down.

The bill (which can be accessed here) proposed to amend the ACA by:

  • Reducing penalties for the individual mandate to $0.
  • Reducing penalties for the employer mandate to $0 for 8 years.
  • Increasing the maximum contribution limit of health savings accounts (HSAs).
  • Allowing states to waive the regulations related to covering people with pre-existing conditions and 10 essential health benefits.
  • Defunding Planned Parenthood and providing funds to Community Health Centers.
  • Eliminating the medical device tax for 3 years.

The Congressional Budget Office estimated the bill would cause an additional 15 million people to be uninsured, due to an increase in premiums, a lack of choice in exchanges (as carriers would pull out of the market), and less pressure to enroll in coverage.

The majority of Republican senators voted in favor of the bill in hopes that it would enter into conference by the House of Representatives so that it could be turned into more robust legislation. However, the possibility also existed that the bill could pass through the House without any change at all, which concerned many senators.

Who will pick up the torch for health care reform now? Will it be a bipartisan approach? We can only wait and see.

Refresh your knowledge on how a bill becomes law. Read Q&A: The ACA & Health Care Reform

July 25, 2017
Motion Passed: The Senate Will Consider the New Health Care Bill
On Tuesday, July 25, the Senate passed a motion to proceed with consideration of the Senate’s health care bill. With a final vote of 51 to 50, two Republican Senators, Susan Collins and Lisa Murkowski, and all Democrats voted against it. Vice President Mike Pence cast the final vote that broke the tie.

The Senate will now take up the legislation (which consists of a number of proposals submitted over the course of the year) for debate. The bill will almost certainly be amended before the Senate will vote on the final iteration of it. In fact, on Tuesday evening, the Senate considered the most comprehensive legislation, which was a compilation of various proposals, but the package failed to reach the 60 votes it needed to move forward in the process. The Senate is likely to consider a “skinny repeal” next, which consists of repealing a few major provisions of the ACA, like the individual and employer mandates.

How to Deal with the Uncertain State of Health Policy
Since the new administration took office in January, there have been numerous competing proposals with respect to the country’s healthcare laws. That makes it a challenging season for any organization that offers health insurance to its employees.

In this article, Michael S. Grant, Executive Director of Employee Benefit Services, explores how employers should start preparing for the most likely changes in health policy, in light of recent developments coming out of Congress.

Learn More

July 20, 2017
A Third Bill: The Obamacare Repeal Reconciliation Act

Late on July 19, 2017, the Senate released a new bill: the Obamacare Repeal Reconciliation Act (ORRA) of 2017. This legislation would repeal many provisions of the Affordable Care Act, including the penalties of the individual and employer mandates, premium tax credits and cost-sharing reduction payments. It doesn’t include provisions to defray consumer cost-sharing or change ACA provisions.

In effect, this legislation amounts to repeal without replacement. If the bill survives, it will be interesting to see what replacement plan is adopted and if it will look anything like those proposed by the two previous bills that were laid to rest.

Of note: The Congressional Budget Office (CBO) estimates that this legislation will grow the number of uninsured to 59 million by 2026 (compared to 28 million under current law), due to an increase in premiums, an increased lack of choice in the exchanges and less pressure to enroll in coverage. In 2015, a similar bill passed both chambers of Congress but was vetoed by President Obama.

July 19, 2017
Senate Health Care Bill Is Dead, but Hope Is Still Alive
On July 13, the same day the Senate’s revised Better Care Reconciliation Act of 2017 bill was released, two Republican senators (Rand Paul from Kentucky and Susan Collins from Maine) voiced their opposition to the bill. Just a few days later (on July 17), an additional two Republican senators (Mike Lee from Utah and Jerry Moran of Kansas) also declared their disapproval of the bill.

Because Republicans could only afford to lose up to 2 votes for the bill to pass the Senate, Majority Leader Mitch McConnell, who proposed the bill, conceded defeat and pulled the bill from consideration.

Currently, it looks like three possible scenarios are being considered:

  • Option 1: McConnell can file a motion to repeal the Affordable Care Act (ACA) without replacement (with the repeal delayed for 2 years). This option is not likely to pass in a Congressional vote as 3 Republican senators have already opposed such a motion. McConnell has indicated that a vote could occur early next week.
  • Option 2: Leave the current law in place. However, most in Congress agree something must be done to halt, or at least limit, the growing number of Americans without access to affordable health coverage. President Trump has suggested in public comments his preferred approach is to allow the ACA to fail on its own terms, which raises the possibility that cost-sharing payments, which are used to defray the insurance company costs for low-income people, may be halted.
  • Option 3: Congress can work on a bipartisan bill, which could potentially garner enough “yes” votes from both party lines to pass both chambers of Congress.

Discussions continue between Republican members of the Senate and the Trump Administration to determine next steps.

July 13, 2017
Senate Releases Updated Draft of Health Care Bill
After receiving a chilly response to its health care bill, the “Better Care Reconciliation Act of 2017” (BCRA), the Senate released a revised bill on July 13, 2017 in an attempt to secure the bill’s passage in a Senate vote.

The bill’s primary revisions are an attempt to keep insurance costs down for consumers, and include:

  • An increase in funding to state-based reforms by an additional $70 billion, in addition to the $112 billion already in the original bill, to help reduce premiums.  The revised bill also provides for $45 billion to treat opioid addiction.
  •  Allowing insurers to offer less comprehensive (and therefore less expensive) plans if they also offer plans that comply with the Affordable Care Act’s (ACA) requirements.
  • Allowing consumers to use Health Savings Accounts (HSAs) to pay for their premiums.
  • Allowing consumers enrolled in catastrophic plans to be eligible for the tax credit as long as they meet eligibility requirements.
  • Allowing states to add the Medicaid expansion population under the block grant.

The revisions are financed by retaining the ACA’s 3.8 percent tax on net investment income and additional 0.9 percent Medicare tax on individuals earning $200,000 a year or couples earning $250,000.

Many of the bill’s original provisions remain in place, including cuts to Medicaid spending, allowing states to waive the ACA’s essential health benefits, and replacing cost-sharing reductions with tax credits.

Two Republican senators, Rand Paul and Susan Collins, have already voiced their opposition to the revised bill, and other senators remain reticent. The Congressional Budget Office is expected to release its report on the revised bill next week.

Version 2.0 of the BCRA may still not go far enough to convince members of Congress—on both the moderate and conservative sides of the aisle—that their constituents will be satisfied with what the bill offers them.

June 28, 2017
Senate Health Care Bill Means 22 Million More Uninsured. Vote Delayed to After July 4.
On June 26, the Congressional Budget Office (CBO) released its estimate that the Senate’s health care bill—the Better Care Reconciliation Act of 2017—will grow the number of uninsured Americans from 14 million in 2018 to 22 million in 2026. This is 1 million less than the CBO’s estimate for the amended American Health Care Act bill, which passed the House in May.

While a vote of the bill was originally scheduled for this week, Senate Republicans were forced to delay the vote until after the July 4 recess due to opposition from an estimated 5 Republican Senators. (As previously reported, Republicans can only afford to lose up to 2 votes for the bill to pass the Senate assuming no Democrats vote for the bill.)

Additionally, a number of important entities have come out in opposition to the bill in its current form, including the American Medical Association, the National Association of Medicaid Directors and Blue Shield of California.

June 22, 2017
Senate Releases Discussion Draft of Health Care Bill
The Senate released a draft health care bill, called the "Better Care Reconciliation Act of 2017," for discussion purposes on June 22, 2017. Based on an initial review of the 142-page bill, the bill would undo major parts of the Affordable Care Act (ACA) and overlaps in many ways with the American Health Care Act (AHCA) bill that was passed by the House on May 4. Additional clarifications are sure to come as everyone has time to fully digest this lengthy bill. Some of the key provisions of the Better Care Reconciliation Act of 2017 are:

  • Reduces penalties for the individual and employer mandate to $0. (Unlike the AHCA, the bill does not include a surcharge on premiums for individuals who have a gap in coverage.)
  • Removes most of the ACA's additional taxes, such as the additional Medicare tax on high earners.
  • Allows for the waiver of the ACA's essential health benefits by individual states.
  • Phases out the ACA's Medicaid expansion over four years beginning in 2020.
  • Allows states to institute work requirements for Medicaid eligibility.
  • Provides for tax credits to help people pay for insurance based on age and income. Anyone earning up to 350% of the federal poverty limit would be eligible for credits.
  • Allocates funds for cost-sharing subsidies for the individual insurance market through 2019.

The Congressional Budget Office (CBO) is expected to release its report on the bill early next week. The CBO report will provide insight into how much the bill will cost and how many people it would affect.

The Senate is expected to vote on the bill as early as next week. No Democrats are expected to vote in favor of the bill, meaning that Republicans cannot afford to lose more than two votes. Following the bill's release, four conservative Senators stated that they were opposed to the bill in its current form as it does not sufficiently reduce costs. In light of this opposition, changes to the bill are likely.

May 24, 2017
AHCA Means 23 Million More Uninsured Americans, According to the CBO
According to estimations by the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) released on May 24, the current American Health Care Act (AHCA) bill will cause the number of uninsured Americans to grow to 23 million by 2026. Additionally, because of the ability for states to use waivers for certain provisions under the current law, coverage would be less comprehensive than what is received today and sicker people may not be able to find affordable coverage while younger individuals could benefit from lower premiums. The CBO also estimates that the bill would cut the deficit by $119 billion.

Back in March, the CBO estimated that the original AHCA bill would grow the number of uninsured Americans from 14 million in 2018 to 24 million in 2026. Additionally, repealing many of the provisions of the Affordable Care Act (ACA) would reduce federal deficits by $337 billion over the coming decade. The potential growth of the uninsured caused many in Congress to turn away from the bill. Hence the House chose to take the bill back to the deliberation table rather than risk being voted down.

In May, after a number of alterations to the bill, its authors narrowly whipped enough votes for it to pass the House — despite not having been submitted first to the CBO for an updated estimation.

Today’s news from the CBO is not much different than it was in March, when it comes to the potential number of uninsured (and underinsured). This will most likely be a consideration for the Senate as they craft their own version of the bill.

May 22, 2017
Cost Sharing Reduction Payments to Carriers will Continue Until Mid-August.
As part of the Affordable Care Act (ACA), cost sharing reduction (CSR) payments were implemented in order to keep costs down for consumers of ACA marketplace plans. With this feature of the ACA, the federal government reimburses insurers for the costs they incur in providing a discount to low-income Americans (through the “Silver” plan on the exchanges).

In 2015, the House of Representatives sued the Obama administration claiming these payments hadn’t been appropriated by Congress, and were therefore illegal.

In 2016, a lower court voted in their favor. In turn, the Obama administration appealed the ruling. On May 22, 2017, the White House and Congress filed a motion to delay a court hearing for another 90 days, which keeps CSR payments in place until mid-August, until the issue is taken up again.

According to analysis by the Kaiser Family Foundation, if CSR payments are withdrawn, premiums on the ACA marketplaces could increase by 19 percent, or carriers might leave the exchanges entirely to avoid the risk. Currently, 7.1 million people are receiving a cost sharing reduction.

May 4, 2017
The House Passes Its Health Care Bill
The House of Representatives passed the American Health Care Act bill, sending it to the Senate after months of debate. After the recent addition of the MacArthur Amendment, the bill narrowly passed by a vote of 217 to 213.

The present iteration of the bill would do the following:

- Give states 3 types of waivers, which allow them to:

  • Specify their own essential health benefits (waive the federally mandated ones of the Affordable Care Act [ACA]). Since the ACA’s prohibitions on lifetime limits and annual out-of-pocket maximums only apply to essential health benefits, States that select this waiver would also be able to modify these—not only for the individual and small group markets, but in the large group market as well.
  • Allow carriers to charge more to people based on age.
  • Allow carriers to charge more for people with pre-existing conditions who have a lapse in coverage.

- Provide some federal funding for state-implemented high-risk pools.
- Repeal Medicaid expansion and give states the option to select between two choices of Medicaid funding: block grants vs. per capita allotment.
- Give states permission to institute a work requirement as a condition to receiving Medicaid.
- Terminate the individual and employer mandates, the small business tax credit, and various other taxes and fees used to defray ACA costs, including the net investment income tax, the Provider Health Insurance Tax, and the taxes on prescription and over-the-counter medications and medical devices.
- Increase the HSA contribution limit to the amount of the plan’s deductible and out-of-pocket limits.
- Terminate limitations on FSA contributions.
- Allow both spouses to make catch-up contributions to one HSA.
- Repeal the excise tax on HSAs (health savings accounts) and Archer MSAs.

The AHCA bill, would leave the following provisions of the ACA in place:

- Coverage for pre-existing conditions.
- Coverage for dependent children up to age 26.
- The Cadillac Tax (40% tax on high-cost health plans), which has been postponed to 2026.
- The Patient-Centered Outcomes Research Fee (PCORI) (for carriers and self-funded plans).
- Requirements on tax-exempt hospitals.
- A requirement that employers report the value of health benefits on their employees’ W-2.

The bill may face further changes in the Senate as members of that chamber deliberate its provisions.

Read a detailed summary of AHCA bill’s implications.

April 28, 2017
Proposed Amendment to the American Health Care Act
A proposed amendment to the American Health Care Act (AHCA) bill is currently under review by members of the House. The total AHCA bill (with the new MacArthur amendment) was approved by House Freedom Caucus members on Wednesday, and it is currently under review by the more moderate House Republicans, including the Tuesday Group. Because House Democrats have not been included in bill negotiations, their support is not expected. As such, the bill must get the majority of House Republican votes (216 out of 238) for it to pass in the House and move to the Senate. The full draft of the amendment is available here.

As noted in the April 21 entry below, the amendment provides that States could apply for waivers of certain requirements in order to “encourage fair health insurance premiums.” The amendment does not, however, make any changes to the Medicaid repeal provision in the original AHCA bill.

Specifically, the amendment lays out three types of waivers States could use, as follows:

Waiver option A: States can specify a “higher” ratio for the age-band rating in marketplace plans.
Currently, the ratio is 3:1 (older enrollees cannot be charged more than three times the amount charged to young adults for the same plan). However, the original AHCA bill proposes a ratio of 5:1. It’s not clear to which ratio the entry is referring.

Waiver option B: States can specify their own essential health benefits for the individual and small group market.
Since the Affordable Care Act’s (ACA) prohibitions on lifetime limits and annual out-of-pocket maximums only apply to essential health benefits, States that select this waiver would also be able to modify these—not only for the individual and small group markets, but in the large group market as well.

Waiver option C: States can allow insurers to underwrite for health status.
States could permit insurers to impose health status underwriting on individuals who haven’t maintained coverage. (This takes the place of the ACA’s Individual Mandate in encouraging consumers to purchase and maintain health coverage.) The amendment provides that it should not be construed to allow insurers to limit access to health coverage for individuals with preexisting conditions.

Among other requirements, in order to be approved for a waiver, a State must show how the waiver would do at least one of the following: reduce premiums, increase enrollment, stabilize the market, stabilize premiums for individuals with pre-existing conditions, or increase the choice of health plans.

A State’s waiver request would be immediately approved. The Department of Health and Human Services would have 60 days after the date of the submitted application to deny approval for not being in compliance with any of the application requirements.

April 21, 2017
A New Health Care Bill Coming Soon?
Republican leaders in the House have been working on new health care reform legislation that could bridge the divide between their conservative and moderate colleagues. Where conservative Republicans would like to get rid of the Affordable Care Act’s consumer protections (also called Title One reforms) and Medicaid expansion, moderate Republicans are fighting to keep these provisions in place. Title One reforms include mandated coverage for pre-existing conditions, essential health benefits and community rating (which prohibits consumers from being charged differently based on their health status).

According to reports, the current draft of the legislation supports giving states waivers from the Title One provisions. In turn, the federal government would provide those states with additional funding to cover insurer costs for sick individuals that are set up in high-risk pools. States would also need to show they are putting in place alternative measures to lower premium costs and expand coverage.

The White House is hoping the new blueprint will be circulated as early as today or Saturday and put up to a House vote as early as next week. However, House Republican leaders appear to be less optimistic in getting the legislation passed so quickly, as they first would need to review the legislation and whip House votes before voting can take place.

April 18, 2017
ACA Replacement Bill Withdrawn, Now What?*
Because the House was unable to pass the American Health Care Act (AHCA), the Affordable Care Act (ACA) remains current law, and employers must continue to comply with all applicable ACA provisions. While the future of the ACA as a whole is currently unclear, some definitive changes have been made to some ACA taxes and fees for 2017. Employers should be aware of the evolving applicability of existing ACA taxes and fees so that they know how the ACA affects their bottom lines.

Changes to ACA Taxes
A federal budget bill enacted for 2016 made the following significant changes to three ACA tax provisions:

  • Delayed implementation of the ACA’s Cadillac tax for two years, until 2020
  • Imposed a one-year moratorium on the ACA’s health insurance providers fee for 2017
  • Imposed a two-year moratorium on the ACA’s medical device excise tax for 2016 and 2017

Changes to ACA Fees
In addition, the ACA’s reinsurance fees expired after 2016, although the 2016 fees will be paid in 2017. Reinsurance fees may be paid in either one lump sum or in two installments. Reinsurance fees paid in one lump sum were due in full on Jan. 15, 2017. Reinsurance fees paid in two installments are due as follows:

  • January 15, 2017: Remit the first contribution amount of $21.60 per covered life.
  • November 15, 2017: Remit the second contribution amount of $5.40 per covered life.

March 24, 2017
House Republicans Pulled Their Bill From the Voting Floor
After yesterday’s vote cancellation, the House vote on the AHCA bill was rescheduled for today. However, as the day progressed it became increasingly evident that there would simply not be enough votes to move the bill forward. As such, speaker of the House Paul Ryan announced that the American Health Care Act (AHCA) repeal bill has been pulled. Additionally, he stated that the Republican House would be moving away from the subject of health care reform and would start working on the rest of their agenda.

The Affordable Care Act remains in place without any changes. Employers are advised to continue their ACA compliance efforts.

Next Steps: While both Republican and Democratic leadership both agree that there are issues with the ACA that need fixing, particularly the rising costs of premiums and deductibles in the individual market and the lack of carrier choice, it remains to be seen if the issue will be taken up now by the Senate or even the House Democrats. Additionally, Phase 2 of the AHCA consisted of Health and Human Services (HHS) Secretary Price using his authority to affect changes in the ACA law. However, at least some elements of his strategy were dependent on passing the Republican House repeal bill.

March 23, 2017
The House Cancels Planned Vote on the AHCA Bill
The House vote on the American Health Care Act (AHCA) bill, which was scheduled for today, was cancelled. It is unclear when the vote will take place. No Democrats are expected to support the bill. As such, about no more than 22 Republicans can vote against the bill for it to pass the House. Earlier this week, Republican leaders tweaked the bill in order to garner additional moderate and conservative Republican votes. However, it appears the bill still falls short of the support it needs to be voted through to the Senate.

March 23, 2017
Senate Reviews Bill Repealing the McCarran-Ferguson Act with respect to Health Insurance
On March 22, 2017, the Competitive Health Insurance Reform Act of 2017 was approved in the House by a vote of 416-7. On March 23, 2017, the bill was read by the Senate and referred to the Committee on the Judiciary.

This bill would repeal the McCarran-Ferguson Act exemption to the business of health insurance. In so doing, antitrust laws could be enforced against health and dental insurance companies that engage in unfair methods of competition. It is not yet clear how the bill would practically affect the health insurance industry.

March 20, 2017
House Republican Leaders Make Changes to the American Health Care Act (AHCA) In Advance of the House Vote
Republican leaders made a number of changes to the AHCA in advance of the House vote anticipated this Thursday.

The amendments primarily affect provisions related to the repeal of the expansion of Medicaid under the Affordable Care Act (ACA) and how Medicaid may be provided going forward. For example, States will have the option of instituting a work requirement as a condition to receiving Medicaid, and, beginning in 2020, States may opt to receive a flexible block grant of funds for a period of 10 years rather than a per capita allotment.

The amendments also make changes to certain effective dates under the AHCA, including the following:

  • Accelerate the repeal of certain Medicaid requirements from December 31, 2019 to December 31, 2017.
  • Further delay the implementation date of the Cadillac tax from 2025 to 2026.
  • Accelerate the repeal of various ACA taxes and the limitations on Flexible Spending Account from January 1, 2018 to January 1, 2017.

March 17, 2017
Health Care Reform Bill Expected to Be Amended and Taken To House Floor for Vote Next Week
The American Health Care Act of 2017 is expected to be brought to the House floor for a vote next week, once the law is modified to include certain changes, including adding an option for states to impose a return-to-work requirement for able-bodied individuals who receive Medicaid. Additionally, states may be given the option to select between two choices of Medicaid funding: block grants vs. per capita allotment.

March 16, 2017
House Budget Committee Advances Bill
The House Budget Committee narrowly approved the legislation known as the American Health Care Act (AHCA) by a margin of 19-17, including 3 Republicans who voted against the bill. This means that the legislation from the Energy & Commerce and Ways & Means Committees has been combined into a single reconciliation (or budget) bill. The next step in the process calls for the House Rules Committee to review and approve the bill, subject to the actions of House Republicans who may revise the bill to increase its chances of passing the House and Senate.

House Republicans who support the bill believe that this legislation is the first action in a multiphase process. According to Diane Black, Chairman of the House Budget Committee, members of the Judiciary Committee and the Education and Workforce Committee are working on separate pieces of legislation that aim to foster competition among health insurers, implement malpractice reforms, and allow small businesses to create association health plans and negotiate lower costs for their employees.

March 13, 2017
Congressional Budget Office Analysis Released
The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) estimate that due to the changes to subsidies and the Medicaid program as proposed in the American Health Care Act bill, the number of uninsured would grow from 14 million in 2018, to 21 million in 2020 and 24 million in 2026. Additionally, repealing many of the provisions of the Affordable Care Act would reduce federal deficits by $337 billion over the coming decade.

This analysis informs both chambers of Congress as they continue to examine and prepare to vote on the bill.

March 9, 2017
House Committees Approve Their Bills
On the morning of March 9th, the House Ways and Means Committee approved their portion of the legislation known as the American Health Care Act. On the same afternoon, the House Energy and Commerce Committee also approved its portion of the legislation.

Beginning on Wednesday, March 15th, the House Budget Committee will markup both bills and bring them to a full House vote. Thereafter, the legislation would move on to the Senate. If both chambers of Congress approve the legislation, it will be submitted to the President of the United States. If the President approves the bills, then they will become law.

March 6, 2017
Republicans release proposed legislation called the American Health Care Act (AHCA).
On Monday, March 6, Republicans in the House Ways and Means Committee and Energy and Commerce Committee released proposed legislation called the American Health Care Act (AHCA) to repeal and replace the Affordable Care Act (ACA). The legislation will next be reviewed by the full committees beginning on Wednesday, March 8. The AHCA seeks to make changes to Medicaid. Additionally, some of the key provisions in the legislation relate to ACA taxes and mandates.

Learn more

February 16, 2017
House Republican leaders present an outline of their plan to replace the ACA.
Proposed changes include: (a) rolling back Medicaid expansion and replacing it with block grants, (b) providing tax credits for people to purchase the health plan of their choice even outside state lines, (c) providing incentives for consumers to establish health savings accounts that help to pay for expenses and (d) eliminating the individual and employer mandates. The outline does not specify how the benefits would be funded.

Despite President Trump’s apparent endorsement of the proposal during his address to Congress on February 28, the GOP has since stated that the outline is an outdated draft and the bill is still being written.

February 10, 2017
Tom Price is confirmed as secretary of the Department of Health and Human Services.
While a congressman for Georgia, Price sought the repeal of the ACA. In his new role in HHS, he is expected to continue pursuing this overhaul.

January 20, 2017
President Trump issues an executive order on the ACA.
The order does not change the law nor how it is interpreted; rather it gives instruction to the Department of Health and Human Services and other government agencies to interpret the law in a way that scales back the economic responsibilities to the public sector.

Learn more

January 12, 2017
Congress passes a budget resolution.
This is the blueprint (agreed on by both chambers, the House of Representatives and the Senate) on what the federal government should spend and take in in revenue during the next fiscal year.


*This information is neither intended nor implied to be legal or regulatory advice or counsel. The information on this site is provided for general informational purposes only and represents a summary based on publicly available sources. We make no representations about and assume no responsibility for the accuracy or completeness of information contained in this document and such information is subject to change without notice.  Sources are available upon request.

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