Repeal and Repair – A New Look for ACA

March 15th, 2017 by Thomas Harte

On March 7th, 2017, the Republican House Leadership released the DRAFT legislation to “repeal and replace” the Affordable Care Act (ACA) – this legislation is titled “American Health Care Act” (AHCA). Most importantly, this legislation will not be seen, by many, as “repeal and replace”; rather, considering the extensive maintenance of current provisions of the ACA, it should be considered “repeal and repair”.

As an example, some of the provisions of the ACA that will be continued in the AHCA include, but are not limited to, the following:

• Dependents up to age 26 can stay on their parent’s health plan
• Insurance companies will not be able to deny coverage to individuals with pre-existing conditions or charge them a higher premium
• Prohibition of annual or lifetime benefits
• Essential health benefits

The most important “modifications” under the American Health Care Act are as follows:

• $600 Billion of Taxes Repealed
  • ACA’s health insurance tax
  • Medical device tax
  • Net investment tax
  • Medicare wage surtax increase
  • Tanning tax
• Elimination of the individual mandate penalty, retroactive to January 1, 2016
• Elimination of the employer mandate penalty for employers with more than 50 full time equivalents
• Delay of the Cadillac Tax until 2025 (40% excise tax on the amount of the aggregate monthly premium of each primary insured that exceeds the year’s applicable dollar limit), which will cost the Federal Government $45 billion over 5 years.

An “interesting” addition under DRAFT legislation include the following:
• Allows for an increase in contributions for a health savings account of up to $6,550 for an individual and $13,100 for a family.

This draft legislation was scheduled for “mark-up” at the House Way & Means and Energy & Commerce Committees on Wednesday, March 8th. Since that time, the following has occurred:

• House Ways & Means: Following an 18-hour markup hearing and shortly after 4:00 a.m. on Thursday, the House Ways and Means Committee voted 23-16 along party lines to pass their committee-relevant elements of the bill.
• House Energy and Commerce Committee: By Thursday afternoon, the House Energy and Commerce Committee voted 31-23 along party lines to pass their portions, following their own 27-hour markup hearing.
• Budget Committee: The legislation now heads to the House Budget Committee where the various portions will be rejoined to form a single bill again, with a hearing scheduled for next Wednesday (March 16th).
• House Rules Committee: This committee will wrap up the committee requirements and the final bill can be considered on the House floor.

Congress is scheduled to be in session through April 7th, when it will take a two-week recess and reconvene on April 24th and largely remain in session until the August recess. The forecasted timetable for the reconciliation legislation currently has it being considered on the House floor at the end of this month. If passed, the Senate would need to take up the process through each of its committees of jurisdiction before passing it on the chamber’s floor. If there are any differences between the House and Senate versions, Congress can either have the opposite chamber pass their version as-is, or they can attempt to bridge their difference through a conference committee. This timetable would likely push any legislation well into May, although the goal of Republican leadership is to have the bill through the House and Senate by Easter.

As a reminder, until any legislation is formally enacted into law, the ACA remains the law of the land and all of its mandates, penalties, and enforcement remains in effect and any affected employer or individual should continue to follow all rules and regulations that are currently in place.