Blue Cross Blue Shield of WNY

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 a member?


Individual Mandate Repeal: The AHCA repeals the ACA’s requirements that most individuals obtain health insurance or face tax penalties. Were it to become law, the effective date would be January 1, 2016, providing retroactive relief to those affected by the penalty in 2016.


It is important to note that in New York State, many parts of the AHCA may not be applicable. New York has a long history of rich benefits and consumer protections, including community rating, as opposed to age ratio ratings, and mandates to cover pre-existing conditions. Additionally, the AHCA bars the use of tax credits for plans that include abortion coverage, which is a mandated benefit in New York State. The impact of the AHCA or any replacement legislation on New York will heavily rely on interpretation from federal and state regulators as much as the actual legislative language.


To encourage individuals to maintain insurance coverage, beginning in 2019 the AHCA permits insurers to impose a 30% surcharge on premiums for 12 months for individuals who go two months or more without health care coverage and then purchase health insurance in that same year. There has also been a lot of debate on the impact of the AHCA on “pre-existing conditions” and high risk pool funding. We are continuing to analyze the high risk pools provisions of the AHCA and how they will impact consumers with preexisting conditions. As the legislation works its way through the Senate, we hope for more clarity on how these provisions will be implemented to best serve our members.


The AHCA would continue to allow young adults to remain on their parent’s insurance until age 26. The AHCA repeals or delays more than a dozen taxes that were used to help finance the ACA:

• Health Insurance Tax – Repeals the tax on health insurance, which adds about 3% to premiums.

• Net Investment Tax — Repeals the 3.8% tax on net investment income for taxpayers with incomes more than $200,000 or $250,000 for couples.

• Medical Device Tax — Repeals 2.3% medical device tax imposed on a wide array of devices.

• Chronic Care Tax — Repeals the increased threshold for the itemized deduction of unreimbursed medical expenses.

• Cadillac Tax — Delays until 2026 the law's tax on certain high-value, employer-sponsored health insurance plans.


*Sources: Congressional Quarterly, Washington Post, New York Times, Wall Street Journal


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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