American Health Care Act Passes Last Week – Nothing Has Changed – The Road is Unclear

Below is the text of a legislative update we received from our team at The Council of Insurance Agents and Brokers (CIAB) last week.

The House did pass a bill on Thursday to replace the Affordable Care Act; however, this does not change any of the current portions of the law that have been implemented or tax reporting for 2017.  As you can see from the notes below, there is a long road ahead in the Senate as both sides still have a lot to work out on this legislation.

Early, Cassidy & Schilling and our Employee & Executive Benefit Team will continue to try to keep you informed of the facts and your responsibilities as an employer in this ever changing environment.  Please continue to rely on us to relevant, unbiased, useful information for you and your teams.

The U.S. House of Representatives narrowly passed the American Health Care Act (AHCA) today by a vote of 217 to 213. Every House Democrat and 20 House Republicans opposed the measure.  

The AHCA was given new life after language intended to bolster high-risk pools to cover preexisting conditions was negotiated by Congressmen Fred Upton (R-MI) and Billy Long (R-MO) last week.  

The bill eliminates the employer and employee mandates; replaces the ACA’s income-based subsidies with tiered tax credits, gradually increasing for older Americans; allows states to apply for waivers to define their own essential health benefit requirements; expands the limits for Health Savings Accounts; discontinues Medicaid expansion in 2020; and repeals most of the ACA’s taxes. The legislation would delay implementation of the Cadillac Tax by five years, from 2020 to 2025, and it importantly preserves the tax exclusion for employer sponsored insurance.  

Since the bill was last considered on the House floor in March—without culminating in a vote—two significant changes have been made. Click here for a memo detailing those changes, as composed by our legal team at Steptoe & Johnson.  

And click here for Steptoe’s side by side comparison of the ACHA and the ACA.  

Thursday’s vote was a major victory for the Trump Administration and Speaker Ryan. The AHCA will now be considered by the U.S. Senate where its fate is far from clear.  

There are several changes likely to be made to the package in the Senate, but the chamber’s ability to amend the legislation will be hampered by its own reconciliation rules, which will limit the bill to provisions that have a fiscal impact. These limitations allow the Senate to bypass its normal 60-vote threshold and pass the measure by a simple majority vote.  

Republicans have a 52-seat majority and will only be able to lose two votes from their caucus. Democrats are expected to unite against the measure. Rumored changes to the package in the Senate could include increased subsidies, more money for high risk pools, and changes to Medicaid expansion provisions. More details on possible Senate moves can be found here.


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