May 4, 2017

The House Finally Passes AHCA. What’s Actually In It and What Happens Next?

Rich Meade

The House finally put together a winning combination of policy to pass their Affordable Care Act (ACA) repeal and replace bill known as the American Health Care Act (AHCA) today by a vote of 217-213. Below is a summary of the actions they took to get them over the hump and the key provisions of AHCA. For more details on discussions surrounding the AHCA, you can view past editions of Healthcare Today.

AHCA as Reported from Committee and Amended by Managers’ Amendments

Schweikert-Palmer Amendment

Congressmen Schweikert (R-AZ) and Palmer (R- AL) filed an amendment to AHCA at the Rules Committee that creates a Patient and State Stability Fund to allow states to: provide financial assistance for high-risk individuals; stabilize individual and small group markets; lower the cost of insurance in the individual and small group markets; create incentives to purchase insurance; promote access to preventive health and dental services; and provide assistance for out-of-pocket costs.

The amendment strikes the provision that allows states to provide assistance to insurance companies in the individual market that have claims that exceed $1 million and inserts a new federal invisible risk sharing program. The program provides the Administrator of the Centers for Medicare and Medicaid Services (CMS) $15 billion starting in January of 2018 until the end of the year of 2026 to provide payments to insurance companies in the individual market that experience high claims. The language directs the CMS Administrator to define the details of the program including eligibility and conditions that would automatically qualify for automatic enrollment in the program.

MacArthur Amendment

Negotiations with leadership of the House Freedom Caucus and moderate Republican members produced the MacArthur Amendment to the AHCA which allows states to seek waivers from the provisions of the Affordable Care Act (ACA) regarding essential health benefits, age rating, and community ratings. The waivers duration are for less than 10 years but states will be allowed to ask for an extension.

The community rating provisions of the ACA helped to lower the cost of insurance of individuals with poorer health including those with pre-existing conditions but also raise the cost of insurance for healthier individuals. The push behind allowing for state waivers of the community rating provision was that it would allow for the lowering of premiums of most individuals. Supporters of the amendment stated that the vulnerable populations could receive relief from the State Innovation Grant program and the Patient and State Stability Fund. Many Republicans remained concerned about the impact this amendment would have on the cost of insurance for individuals with pre-existing conditions.

Upton Amendment

Congressmen Fred Upton (R-MI) and Billy Long (R-MO) were two prominent Republicans who were against the AHCA over the potential impact on individuals with pre-existing conditions. During a meeting at the White House, the two congressmen were able to convince President Trump to add $8 billion over the next five years to the Patient and State Stability Fund for states that received waivers from the community rating provisions of the ACA. These additional funds are intended to provide premium relief for individuals with pre-existing conditions.

McSally Bill

Shortly after the MacArthur amendment was filed, it was discovered the amendment protected certain plans from state exemption, such as those set up under the state innovation waiver of the Affordable Care Act. The protected plans that caused the most controversy were the plans for members of Congress and their staff. To correct this, Congresswoman McSally (R-AZ) introduced a bill to amend the Public Health Service Act to nullify any future bill that is passed by Congress that attempts to protect plans for Members of Congress and their staff. This bill was passed before consideration began on AHCA.  We don’t fully know the motivations for considering this language as a free-standing bill versus an amendment to the AHCA but there is plenty of room for speculation.

Next Steps

The fact that the House was able to pass this bill is significant given the early rhetoric from President Trump and members of Congress on swift action on the issue and all of the twists and turns the bill took. However, this bill is far from becoming law.

We are told the Senate will not begin consideration of the bill until probably June as they await a score of the House passed bill from the Congressional Budget Office (CBO). CBO scored the bill as it came out of the committees and House Leaders did not seek updated scores as amendments to the bill worked their way through the Rules Committee.

We are expecting some significant changes to be made to the bill in the Senate. It is yet to be seen as to how the differences between the House-passed AHCA and Senate-passed (assuming the Senate can pass it) AHCA are resolved. Options include convening a conference committee to resolve differences between the bills or having the Senate send back to the House what they can pass knowing that is all they believe can pass the Congress.


Rich Meade

Rich Meade, a Vice Chairman at Prime Policy Group and Chair of the firm’s Healthcare Practice has over 25 years of experience in legislative, regulatory, political and public relations strategy. He previously served as Chief of Staff to the House Budget Committee. Rich has helped his clients navigate many complex regulatory and legislative landscapes to achieve many public policy successes including transitioning to a new Medicare payment and quality system, and developing, with the Centers for Medicare and Medicaid Services (CMS) and Office of the National Coordinator for Health Information Technology (ONC), a health information exchange (HIE) on the Nationwide Health Information Network (NwHIN).