United States: House Committees Reveal Draft Of Bill To Modify And Repeal Portions Of The Affordable Care Act

On Monday, two House committees with oversight over health care and taxation, Energy and Commerce and Ways and Means, released draft reconciliation bills designed to repeal and alter significant portions of the Patient Protection and Affordable Care Act (PPACA). These long-awaited draft bills, collectively entitled the American Health Care Act (AHCA), would make significant modifications to the health insurance markets and to the operation of state Medicaid programs, and would also repeal or delay several taxes imposed by PPACA.

Energy and Commerce and Ways and Means are holding mark-ups of the legislation simultaneously today, with a House Budget Committee mark-up anticipated next week. Then the bill will go to the House floor for a vote of the full chamber. Despite Speaker Paul Ryan's (R-WI) confidence the bill will move swiftly through the House, significant opposition among the House Republican Conference remains. The so called Freedom Caucus Members have expressed strong opposition to the tax credit and Medicaid expansion provisions in the current legislation and prefer the measure Congress passed previously, which was vetoed by President Obama. Moreover, the Congressional Budget Office (CBO) has not yet released the cost of the bill or the estimated number of Americans who will be covered under the AHCA, further adding to the frustration within the Republican Conference.

In the Senate, Majority Leader Mitch McConnell (R-KY) has echoed similar sentiments as Ryan, saying he hopes to bring a bill to the Senate floor before Congress recesses for two weeks in mid-April. Under the reconciliation process used to bring the AHCA forward, the Senate can only lose two Republican votes in order to pass the measure, and deep divisions among the GOP remain. Some Senators are aligned with the concerns expressed by the House Freedom Caucus Members, while others oppose the proposed Medicaid changes or the prohibition of federal funds for Planned Parenthood. President Trump has voiced support for the AHCA and will likely need to use the power of his office to get it across the finish line. Following passage of the AHCA, Republicans plan to issue additional changes to PPACA through Executive Order and additional legislation. Democrats in both the House and the Senate are expected to oppose the measure.

Foley attorneys are analyzing the impact of changes included in the AHCA, and over the next few weeks will be publishing more detailed analyses explaining the context and potential implications of the changes for the health care industry. Some of the big-picture items notable for their inclusion or absence in the AHCA are identified below.

Changes to the ACA Insurance Markets and Subsidies

The AHCA would make several immediate or near term changes to the health insurance markets established by PPACA.

  • The tax penalties associated with the employer and individual mandates will be reduced to $0 effective January 1, 2016, essentially repealing the employer and individual mandates with retroactive effect.
  • In 2018 and 2019, modifications to the premium tax credits (commonly referred to as subsidies) available under PPACA would take effect. These modifications would adjust the amount of premium tax credits available for the purchase of individual health insurance based on both income and age. Additionally, in 2018 and 2019, premium tax credits would be available for individuals who purchase catastrophic coverage and individuals who purchase off-Exchange individual health insurance. In 2020, a new premium tax credit system would take effect. Under this new system, tax credits would vary based only on age, but would phase out above an income threshold.

    PPACA Transition Period (2018 and 2019) 2020 and Beyond
    Amount of Premium Tax Credit Lesser of actual premium paid by taxpayer or premium for second-lowest silver plan, adjusted by income. Lesser of actual premium paid by taxpayer or premium for second-lowest silver plan, adjusted by age and income. Fixed dollar amounts, set by a schedule. Tax credit amounts increase from $2,000 for people under 30 to $4,000 for people over 60. The credits phase out for higher-income taxpayers (above $75,000 single/$150,000 joint)
    Availability of the Premium Tax Credit On-Exchange purchases only; no catastrophic coverage. On and off-Exchange purchases, including catastrophic coverage. All individual major medical insurance, including catastrophic coverage.
  • The AHCA would not rescind or modify many of the major insurance market reforms implemented by PPACA, including the ability for children to remain on their parents' coverage until age 26, the requirement that individual health insurance be guaranteed issue and guaranteed renewable, the prohibition on pre-existing condition exclusions, and the requirement that health insurance provide coverage of ten "Essential Health Benefits" (EHBs).
  • The AHCA removes requirements that individual health plans satisfy actuarial value requirements to be identified as a particular metal level (e.g., bronze, silver or gold). The AHCA does not provide an alternative method for identifying the metal level of a particular plan.
  • Effective for special enrollments in 2018 and open enrollment for 2019 and later years, health insurance companies in the individual and small group market would assess a 30% premium surcharge if an applicant has gone longer than 63 days without continuous health insurance coverage during a 12-month lookback period. This surcharge applies regardless of the applicant's health status.

Additional Insurance Market Reforms

The AHCA also would promote greater use of alternative approaches by states or by individuals to manage insurance costs, including use of high-risk pools and health savings accounts ("HSAs").

  • The AHCA will create a new Patient and State Stability Fund, which will provide $100 billion between 2018 and 2026 to mitigate the cost of individual health insurance and stabilize state markets. States will be given the flexibility to use these funds to establish or strengthen high-risk pool mechanisms, provide additional subsidies for individual health insurance, make payments to insurers for insureds who incur more than $50,000 in claims during any single year, promote participation in the individual/small group health insurance marketplace, promote preventive care and other public health services, or to defray out-of-pocket costs incurred by covered individuals.
  • Effective January 1, 2018, the AHCA would expand the tax benefits associated with HSAs, and allow consumers to contribute substantially more pre-tax money to an HSA regardless of whether they have individual or employer-sponsored health coverage. HSA contributions would be allowed up to the limits on out-of-pocket expenses permitted for high deductible health plans (for 2017, $6,550 for self-only coverage and $13,100 for family coverage).
  • Effective January 1, 2018, PPACA's limit on the amount an employee may contribute to a health flexible spending account (health FSA) per year (for 2017, $2,600) would be repealed, and employees would again be able use health FSA funds to purchase over-the-counter medications without a prescription, as was the case before PPACA was adopted.
  • While many of the taxes included in PPACA would be repealed, the AHCA retains but delays the "Cadillac Tax" until 2025. The Cadillac Tax is a 40% excise tax on high-cost health coverage provided by employers.

Modifications to the Medicaid Program

The AHCA proposes significant modifications to the financing and eligibility for Medicaid programs, including new incentives designed to reduce states expanding Medicaid coverage as envisioned by PPACA, new limits on federal matching of state Medicaid expenditures, and increased oversight and limitations on Medicaid eligibility.

  • The AHCA would allow states, at their option, to continue PPACA's Medicaid expansion, but would reduce federal matching funds for the expansion beginning January 1, 2020. Expenditures for services for individuals enrolled before January 1, 2020 would be separately identified and continue to be matched at PPACA's enhanced rate if the individual does not have a gap in Medicaid coverage.
  • Scheduled reductions in Medicaid disproportionate share hospital ("DSH") payments would be reversed beginning with 2020; cuts would remain as scheduled for 2018 and 2019. These reductions in DSH payments would not be applied against providers in states that did not expand their Medicaid program.
  • New authority for states to make up to $2 billion per year in increased Medicaid payments, consisting entirely or almost entirely of federal funds, to Medicaid providers in states that did not expand the Medicaid program under PPACA.
  • New "per capita cap" formula would, beginning October 2019, penalize states whose aggregate Medicaid expenditure exceed a pre-determined per-capita target.
  • Multiple revisions to increase oversight of Medicaid eligibility requirements, including:

    • Requirement to revalidate Medicaid eligibility every 6 months.
    • Removal of the ability to cover services provided to a Medicaid beneficiaries during the three months prior to the submission of an application
    • Changes to limit the availability of federal financial participation for individuals who have attested to being citizens or nationals prior to the submission of verifying documentation
    • Termination of certain presumptive eligibility options as of January 1, 2020
    • Requirements for states to consider lottery winnings in Medicaid eligibility
  • Removes requirement for Medicaid expansion beneficiaries to receive a package including "essential health benefits," which includes requirements for access to coverage for mental health and substance abuse disorder treatment services.

Other Notable Changes

  • The AHCA does not seek changes to the benefits or coverage under the Medicare program, although it does remove taxes imposed by PPACA that help finance the Medicare trust fund.
  • An additional $422 million in funding will be provided to Federally Qualified Health Centers through the Community Health Center Fund in 2017.
  • The AHCA would prevent any Medicaid, CHIP, and certain federal block grant payments from being made to Planned Parenthood for one year.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions