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House Passes Health Reform Bill

May 5, 2017

On Thursday, May 4, 2017, the House approved H.R. 1638, the American Health Care Act (AHCA) on a vote of 217 – 213. All of the Democratic Representatives and 20 Republicans opposed the bill. The legislation replaces some provisions of the Affordable Care Act. The bill now heads to the Senate for consideration. The outlook for the bill in the Senate is unclear, with concerns being raised by Senators of both parties.

The AHCA would eliminate the Affordable Care Act’s (ACA) individual and employer mandates and replace the ACA tax credits that reduce insurance premiums for low and moderate income households with tax credits based solely on age that would top out at $4,000 per year for those aged 60-64. The bill increases the ACA “age rating” rules that limit premiums for the oldest enrollees from 3 times the amount charged the youngest enrollee to 5 times that amount. Late amendments made to the bill would also allow states to apply for a waiver to opt out the ACA’s benefit requirements, which would allow insurers to cover fewer types of care. A state waiver could also be sought to allow insurers to charge premiums based on health status. The bill also would eliminate most of the ACA taxes provisions, including the 3.8% tax on net investment income for very high income tax filers.