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American Health Care Act Summary

HR 1628 - American Health Care Act Summary

On May 4, 2017, the House of Representatives passed The American Health Care Act (AHCA) by a vote of 217-213. The legislation makes extensive changes to the 2010 Patient Protection and Affordable Care Act (PPACA), by repealing the individual and employer health care mandates as well as most of the taxes that financed the current system.


The AHCA would, in 2020, convert Medicaid from an entitlement to a capped funding approach that would provide fixed federal payments to states and end additional federal funding for the 2010 law's joint federal-state Medicaid expansion.


As amended, the AHCA would give states the option of receiving federal Medicaid funding as a block grant with greater state flexibility in how the funds could be used.


The bill would also allow states to receive waivers to exempt insurers from having to provide certain minimum benefits in the individual and small group markets. The AHCA would provide $138 billion over five years to states to help pay the costs for individuals with pre-existing conditions whose insurance premiums increased because the state was granted a waiver to raise premiums based on an individual's health status. The legislation creates a $15 billion federal risk sharing program to cover some of the costs of high medical claims and prohibits federal funding to any entity, such as Planned Parenthood, that performs abortions and receives more than $350 million a year in Medicaid funds.


The AHCA now goes to the Senate, which has indicated it will most likely develop its own legislation, although it must first move forward with the AHCA reconciliation process. Before becoming law, any final bill must pass both the House and Senate and be signed by the president. The House version of AHCA is a first look at how the health care landscape could change under the Trump administration.


How does this affect me as an employer?


Employer Mandate Repeal: The AHCA repeals the Affordable Care Act’s (ACA) requirement that employers with more than 50 employees provide health insurance or face tax penalties by setting penalties at $0. Were it to become law, the effective date for repealing the employer mandate would apply would be January 1, 2016, providing retroactive relief to those affected by the penalty in 2016.


The AHCA delays the ACA’s so-called “Cadillac Tax” on certain high-value, employer-sponsored health insurance plans to 2026.


The American Health Care Act (AHCA) retains many of the ACA’s market reforms that remain popular elements with employees. For example, the AHCA would continue to allow young adults to remain on their parents’ insurance until age 26.

News and Media

August 3, 2017:
Senators Plan Bipartisan Hearings On Health Care

Dave Anderson, CEO of HealthNow New York, talks with Steve Inskeep about lawmakers' plans to hold bipartisan hearings on health insurance exchanges. NPR's Scott Horsley has details and analysis.


June 6, 2017:
What's next for the American Health Care Act

The Point of Health podcast features Donald Ingalls, Vice President, State and Federal Relations of BlueCross BlueShield of Western New York. The episode covers the latest updates on Republican's efforts to repeal and replace the Affordable Care Act.


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