Yesterday (May 4, 2017) , the House of Representatives narrowly
passed the American Health Care Act of 2017 (AHCA), which contains major parts
that would repeal and replace the Affordable Care Act (commonly referred to as
Obamacare or ACA). The next obstacle the bill
faces is making it through the Senate, which proves to be a formidable
The nonpartisan Congressional Budget Office has not had time
yet to analyze the current version of the bill, but this is expected next week.
The bill must now pass the Senate and could get pushed back to the House if it
sees changes in the upper chamber.
In the meantime, here are some highlights we know about the
bill based on how it is written today and how it would work:
- The AHCA bill would eliminate the requirement that
people buy health insurance (known as the individual mandate).
- The bill would eliminate penalties for large
employers (50+ employees) that do not provide insurance to their employees.
- The bill would impose a penalty for people who
don’t maintain continuous health insurance. The AHCA would create a penalty for
people who have a gap in their health insurance of more than 63 days. People buying insurance in the individual
market who have a gap of 63 days or longer could be charged a “late enrollment
penalty” by the carriers that could be up to 30% of the premium price.
- The bill would end Medicaid expansion.
- The bill would cut Medicaid spending.
- The bill would change how subsidies to buy
health insurance are allocated.
- The bill keeps requirements that insurers must
sell coverage to everybody.
- The bill would allow states to change which
benefits insurers are required to provide to people who buy plans on their own.
The AHCA would allow states to waive the current requirements of “Essential
Health Benefits” (aka EHB) under Obamacare that are imposed on plans or allow
states to set up their own list of EHBs that insurers must cover in the
- The bill would allow insurers to charge older
people more than under the current law. The ACA limits insurers to charging
older customer to 3 times a much as younger customers in the individual market.
The AHCA expands that ratio to allow insurers to charge older customers 5 times
as much as younger customers (it was 10 times prior to Obamacare).
- The bill would allow states to let insurers charge
older people even more. Under the AHCA, states could seek a waiver from the
federal government regarding the age ratios which would let them set their own
ratios above the 5 times ratio set by the government.
- The bill would allow states to end requirements
that insurers cover pre-existing conditions.
- The bill could lead to states setting up special
insurance programs for high cost patients. The main requirements for a waiver
on pre-existing conditions is that states must set up some kind of program to
cover the most costly customers (aka high risk pools).
- The bill could impact the benefits covered by
employer sponsored insurance.
- The bill would keep the insurance exchanges in
- The bill would allow kids to stay on their
parent’s plan until age 26.
- The bill would repeal multiple taxes that helped
fund the ACA.
- The bill would cut federal spending by hundreds
of billions of dollars.
- The bill would return over the counter
medications to the list of qualified medical expenses for the 2017 tax year.
- The bill would reduce the tax penalty on health
savings accounts from 20% to 10% for distributions that are not used for
- The bill would repeal the limitation of $2500 on
health FSA contributions.
- The bill would increase H.S.A. contributions for
a year to equal the maximum on the sum of the annual deductible and out of
- The bill would allow both spouses to make catch
up contributions in one H.S.A.
We will continue to keep you up to date on the
bill as it progress through legislation.
© 2024 Administrators Advisory Group, Inc. All Rights Reserved