On Thursday, May 4, the U.S. House of Representatives voted 217 to 213 to pass the American Health Care Act (AHCA); there was no Democratic support for the bill, and 20 Republicans voted against it. The bill is the first step in the Republican plan to repeal and replace the Affordable Care Act (ACA), also known as Obamacare. The nonpartisan Congressional Budget Office (CBO) did not have sufficient time to analyze the cost and impact of the bill on insurance coverage; this analysis is expected the week of May 22.
The AHCA was originally scheduled for a vote at the end of March, but was delayed because there were not enough votes to pass it. In the intervening weeks, Rep. Tom MacArthur (R-NJ), co-chair of the moderate Republican “Tuesday Group,” negotiated a deal with Rep. Mark Meadows (R-NC), chairman of the conservative Republican Freedom Caucus, designed to garner enough Republican votes to pass the bill.
The two major sticking points between the factions were: 1) essential health benefits (EHB) coverage; and 2) pre-existing condition protections. The compromise gives states the option to apply for a federal waiver to opt out of these requirements if they institute a high-risk pool.
EHBs: Allowing states to repeal the EHB provisions means that insurers could once again create insurance plans that do not cover certain illnesses. These provisions affect all types of insurance including qualified health plans (QHPs) created by the ACA and employer-provided health care. The EHB provisions require health insurance companies to cover any illness, medical condition or chronic disease that an individual may have. By repealing EHBs, insurers could create an insurance plan that doesn't include coverage for things like kidney disease and cancer.
Pre-existing condition protections: Allowing states to opt out of community ratings (the requirement that insurers cannot charge more to individuals with pre-existing conditions) means that insurers in these states would be able to charge more to individuals based on their medical history. Republican leadership has stated that this could only apply to those who let their insurance lapse and that insurers would still have to offer the insurance, but would be able to charge these individuals more than healthy individuals. Unfortunately, the reason most people allow their insurance to lapse is because they can’t afford to pay their premiums. As typical with dialysis patients, many very ill individuals can’t work and thus lose their insurance, which causes the lapse. Once they find insurance again, the rates will inevitably be unaffordable because of their pre-existing conditions.
Republican leadership expected the legislation to come up the first week of May, but it became clear that there were still not enough votes to pass the bill even with the aforementioned changes. The primary concern among several undecided members was sufficient funding of the high-risk pools. Former Chairman of the Energy and Commerce Committee Fred Upton (R-MI) negotiated with House Republican leadership for an additional $8 billion in funding over five years, which provided enough votes for passage of the amended AHCA.
It is unclear if the additional funding is enough to adequately fund the high-risk pools. Although reports from think tanks say the funds are not adequate, we are awaiting the CBO’s report on the legislation as to the adequacy of the risk pool funding.
The AHCA now moves to the U.S. Senate. In order to move legislation in the Senate with a simple 51-vote majority, the bill must be brought to the Senate floor under somewhat arcane budget reconciliation rules, which generally mean that all provisions in the bill must have an impact—positive or negative—on the federal budget. The Senate is awaiting the CBO report but negotiations within the Republican caucus to develop their version of the AHCA have begun. Several Senators have already stated that the Senate bill not be the same as the House version of the AHCA. As the provisions in the Senate legislation unfold, AKF will continue to keep you updated on the movements of the AHCA.