ACA Repeal and Replacement Update – March 23, 2017
Top takeaways from the week:
1) The House has delayed the vote on the AHCA; 2) On Monday, House leadership unveiled amendments to the AHCA; 3) The CBO released an updated score incorporating the amendments, finding similar coverage losses and less budgetary savings as compared to the original bill; and 4) Senate Democrats sent a letter to Speaker Ryan noting that the Senate Democratic Caucus will not vote to “further erode the healthcare system and strip our constituents of coverage.”
American Health Care Act (H.R. 1628) negotiations continued this week as the White House and House Republican leaders attempted to gain the votes needed to pass the bill in the House. The House Freedom Caucus and other conservative members successfully negotiated significant amendments to the bill, bringing it further right and frustrating moderates who have already expressed concern about the bill’s projected impact on coverage. As of Thursday evening, negotiations seemed at an impasse and the House vote has been cancelled.
President Trump, Vice President Pence, OMB Director Mulvaney, HHS Secretary Price and CMS Administrator Verma all met with Republican lawmakers wavering on passage of the AHCA throughout the week to urge them to vote in favor of the AHCA.
In a private meeting with House Republicans on March 21, President Trump warned holdouts that many may lose their seats in 2018 midterm elections if the repeal effort failed. President Trump also noted that after voting repeatedly to repeal the ACA and campaigning on doing so, Republicans have an obligation to back the bill.
The White House released a Statement of Administration Policy (SAP) on March 22, stating that “this bill begins to fulfill the President’s commitment to rescue American from the failures of the Affordable Care Act (ACA) and expand access to affordable, quality healthcare…If H.R. 1628 were presented to the President in its current form, his advisors would recommend that he sign the bill into law.” SAP: http://bit.ly/2nhWyDN
On March 23, President Trump met with members of the House Freedom Caucus and the more moderate Tuesday Group to further negotiate details of, and support for, the bill. Freedom Caucus Chair Meadows (R-NC) stated that the group discussed additional provisions necessary for the Caucus’ support, including repeal of the ACA’s essential health benefits and other market reforms and consumer protections. Following the meeting, members of the Freedom Caucus indicated that no agreement had been made.
Meanwhile, the Congressional Budget Office (CBO) released an updated analysis of the AHCA incorporating the manager’s amendments, finding that, similar to the original bill, 24 million more consumers would be uninsured by 2026. However, the amended bill would result in only $150 billion in federal deficit reductions between 2017-2026, less than half of the projected savings from the original bill. CBO Analysis: http://bit.ly/2nclU4i
On March 20, the House Rules Committee released two manager’s amendments to the AHCA. The first amends provisions largely related to Medicaid and the ACA’s taxes, and the second amendment makes technical changes to the bill to comply with reconciliation instructions and other issues and revises the provisions on tax credits. Policy amendment and section-by-section: http://bit.ly/2naTGII and http://bit.ly/2nbgKar Technical amendment and section-by-section: http://bit.ly/2nb1WbT and http://bit.ly/2nbgKar Press release from House Committees on Energy & Commerce and Ways & Means: http://bit.ly/2naSJjV and http://bit.ly/2nb3faH
The manager’s amendments include the following changes to the AHCA:
- Sunsets the optional ability for states to expand Medicaid for consumers above 133% FPL effective December 31, 2017. Provides that any new state that might expand Medicaid would receive the state’s regular FMAP, not the enhanced FMAP;
- Allows states to implement work requirements for nondisabled, non-pregnant adults. States could begin using this option beginning October 1, 2017. The bill also provides a 5% FMAP boost for states electing this option;
- Amends the growth rate for per capita caps to be CPI-U Medical +1;
- Amends the DSH allotments for states with more than 6 times the national average to limit required county contributions;
- Provides the option for states to elect to receive a block grant rather than per capita caps. The block grant would be set for a period of ten years, and would be set based on the per capita cost for the eligible population, multiplied by the number of enrollees in the year prior to adopting the block grant. Funding would increase by the growth in CPI, but would not adjust for changes in population. States may only place nondisabled children or nonelderly, nondisabled, non-expansion adults into the block grant. States are required to contract with an auditing entity to conduct audits of its expenditures made with respect to block grant funds.
- Provides $1B to HHS as part of an American Health Care Implementation Fund to carry out:
- Per capita allotments for medical assistance;
- Patient and State Stability Fund;
- Additional modifications to premium tax credit; and
- Refundable tax credit for health insurance coverage.
- Pushes back the implementation of Cadillac Tax until 2026 and accelerates the repeal of other ACA taxes, effective 2017; and
- Reduces the qualifying adjusted gross income threshold from 10% to 5.8% and uses the savings to set up a fund for additional tax credit help for those aged 50-64.
On March 22, the House Rules Committee met to discuss more than 20 amendments as well as the rules under which the AHCA will be brought to the floor. The committee heard testimony from the Chairs and Ranking Members of three House committees that have marked up the bill – Ways & Means, Energy & Commerce, and Budget. As of Thursday evening, the Committee had yet to vote on allowed amendments or the rules for the AHCA vote.
As negotiations on the bill continued through the day on Thursday, House leadership announced that a scheduled floor vote on the bill was cancelled.
Meanwhile, the House passed two bills on March 22 being billed as part of the third phase in the broader “three-phase process” of replacing the ACA. The Small Business Health Fairness Act (H.R.1101) passed by a vote of 236-175, and provides for the establishment of association health plans, which are group health plans sponsored by business associations. The Competitive Health Insurance Reform Act (H.R. 372) passed by a vote of 416-7, closes an antitrust loophole for health insurance companies. Press releases: http://bit.ly/2ncs5FD and http://bit.ly/2ncuHDm
The Senate has been watching closely as the House spent the week working toward a compromise solution. Senate Majority Leader McConnell (R-KY) has maintained his intention to keep the Senate on schedule, noting on Tuesday that the Senate will “reach a conclusion” on an ACA repeal bill next week. However, both Democratic and Republican members of the Senate continued to express concern with the legislation forming in the House – including the bill’s content as well as its ability to pass muster under reconciliation rules.
Sens. Paul (R-KY), Lee (R-UT), and Cotton (R-AR) have said they would not vote for the current bill, while moderates such as Sen. Murkowski (R-AK) have also raised concerns about the coverage losses expected.
Meanwhile, Democrats remain united in their opposition to the bill and the compromise provisions being negotiated in the House.
On March 22, Senate Finance Committee Ranking Member Wyden (D-OR) and House Energy & Commerce Committee Ranking Member Pallone (D-NJ) released new information showing that the AHCA’s repeal of the tax on prescription medications would increase aggregate Medicare Part B premiums by $8.7 billion through fiscal year 2027. Press release: http://bit.ly/2ncI0nd
On March 23, Senate Democrats stated that they have found multiple examples of potential violations of the Byrd rule, which bars provisions in reconciliation bills that have no effect on spending or revenue or where the budgetary effect is “incidental” to the policy. In floor remarks, Senate Minority Leader Schumer (D-NY) pointed to two provisions: imposing work requirements on Medicaid recipients and barring the use of tax credits for health insurance policies that cover abortion.
On March 24, Sen. Shaheen (D-NH) along with 42 members of the Senate Democratic Caucus sent a letter to House Speaker Paul Ryan warning that he will not have their support for further repeal legislation as outlined in phase three of the Speakers “three-phase plan”. Further, the letter argues that Democrats have enough votes to sustain a point of order on repealing essential health benefits if the provision is included in the House reconciliation bill and to block a vote if it is considered as separate legislation. Letter: http://bit.ly/2nNs6Tl
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