Republican House Leadership released the text to the American Health Care Act. This draft legislation is intended as the House reconciliation bill to repeal and replace the Affordable Care Act.
The draft legislation is scheduled to go to mark up tomorrow in the House Way & Means and Energy & Commerce Committees on Wednesday, March 8, and is expected to be scored by the Congressional Budget Office soon. The draft legislation could see considerable changes during mark up and scoring, and will still need support from the Senate in order to pass. We will have a full review of the draft legislation and any changes made as soon as they are available.
Here’s what this new plan looks like:
- It eliminates both the individual and employer mandates
- It expands health savings accounts. In 2017, the maximum contributions are $3,400 for individuals and $6,750 for families. The House GOP bill would increase the annual limit to match the annual deductible and out-of-pocket expenses, which could be at least $6,550 for individuals and $13,100 for families.
- It retains protections for people with pre-existing conditions
- It allows dependents to stay on their parents coverage until age 26
- It repeals Obamacare taxes in 2018 and freezes money sent to the states in 2020
- It replaces subsidies with advanceable, refundable tax credits for people without employer-sponsored health coverage. (Advanceable tax credit allows an individual to receive assistance at the time of purchase, rather than being reimbursed when filing a tax return. Refundable tax credit is one that is available to an individual even if he or she has no tax liability). Subsidies would be tiered based on age – $2,000 for younger people increasing to $4,000 for people over 60. Subsidies would phase out for individuals earning over $75,000 or family income over $150,000
- It maintains the employer tax deduction for insurance coverage
- It allows existing ACA taxes to stay in place through 2018
- It maintains a fairly unpopular Cadillac tax on expensive health plans, but that tax will not be levied until 2025
There was no estimate on how much the bill will cost, creating a risk for Republicans as they move forward. The proposal is paid for by eventually repealing Obamacare’s expansion on Medicaid, cutting insurance subsidies and by keeping, but delaying a tax on high-cost insurance plans.