AHCA Highlights – March 2017
While the AHCA may be amended before passage, these are the current main impacts to the ACA:

  • Repeals individual and employer mandate penalties retroactive to Jan. 1, 2016

  • Expands the individual market age rating band from 3:1 to 5:1

  • Replaces current income-based subsidies with age-based tax credits beginning in 2020

  • Repeals most fees and taxes, but maintains Cadillac Tax, which would be delayed until 2025

  • Ends enhanced funding for Medicaid expansion by end of 2019, then transitions to a state block grant system
  • Makes changes to Health Savings Accounts and Flexible Savings Accounts (increased limits / OTC permitted again)

The AHCA creates a transitional period through the end of 2019 before longer-term changes take effect in 2020. The bill contains provisions intended to stabilize the individual market and encourage continuous coverage during the transition.

The AHCA is only the first step of repealing and replacing the ACA. Additional legislation likely would be required to realize the full Republican vision of repeal and replace, including non-budgetary provisions. That legislation would require 60 votes in the Senate — necessitating support from Democrats. It is expected additional legislation will come by year end or early 2018.

 

How the AHCA Can Become Law: Budget Reconciliation Process
Budget reconciliation can begin in either chamber of Congress (House or Senate), but identical versions of the bill must pass both chambers before being signed by the President and becoming law.

The AHCA has already gone through the first step in the House: consideration and mark-up by the two authorizing committees that received budget reconciliation instructions. The next step is for the House Budget Committee to combine the two bills and hold its own mark-up, expected on March 15. After the Committee approves the combined bill, the full House must vote and pass the bill before it moves to the Senate. The Senate can choose to either begin consideration of the House bill or substitute its own version of repeal and replace. It is widely anticipated that the Senate will skip the committee process and raise the bill on the floor for debate and eventual vote.

The Congressional Budget Office is expected to release estimates on the overall cost and coverage impacts of the bill any day, which may further impact debate.

If there are differences in the bills approved by the House and Senate, there are two paths forward: 1) the House could pass the Senate bill and send it to the President; or 2) a bicameral conference committee can meet to negotiate a new compromise bill. That negotiated bill would then have to be passed by both chambers, before sending it to the President for signature. 

Timeline for Legislative Action
Congress is hoping for action on the AHCA in the next few weeks, including a potential vote on the House floor the week of March 20. The process may slow down to ensure there are enough votes to pass the bill. Outside of deadlines requested by party leadership, there is generally no set legislative timeline. President Trump has expressed strong support of the initial bill.

Reminder: ACA Compliance is Required Until Official Guidance Otherwise
As Congress continues to work on their repeal and replace legislation, it’s important to remember that ACA compliance is required until official guidance to the contrary is issued. For a customized timeline and more information about ongoing annual responsibilities and applicable employer deadlines under the ACA, visit YourACARoadmap.com. 

Staying Informed
To help you keep up to date on the evolving state of health care reform, Cigna has created a new Repeal and Replace Update webpage. This page offers a snapshot of the latest regulatory and legislative activity. Be sure and bookmark Cigna's reform website at www.InformedOnReform.com.

Brought to you by Cigna Health Care Reform Consulting and Communications (HCRCC).