House approves bill to replace key provisions of the Affordable Care Act; All eyes turn to the Senate

The House of Representatives on May 4, 2017, narrowly voted 217-213 to pass the American Health Care Act (AHCA, H.R. 1628). No Democrat voted in favor of the bill and 20 Republicans voted against the bill. As many recall, the House on March 24, 2017, cancelled a planned vote on the AHCA due to a lack of support in the Republican conference.

In the ensuing weeks, three amendments to the AHCA were drafted by House members in an effort to win additional votes for the underlying bill. This ultimately paved the way toward passage in the House today on a slim majority vote. Following the vote, the House went into recess until May 16, 2017.

The AHCA now goes to the Senate for its consideration and likely modification in the coming weeks. Based on the next steps in the process, it may take well into the summer months before a final piece of legislation could be signed into law by President Trump.

The House bill seeks to repeal key provisions of the Affordable Care Act (ACA) and enact alternative health care policies that in general would:

  • Redesign advanceable, refundable tax credits for individuals who do not have access to employer-sponsored coverage
  • Restructure and cap federal Medicaid financing to the states
  • Repeal most taxes and fees enacted under the ACA; and
  • Provide $138 billion over 10 years in federal funding for state programs intended to help stabilize and reduce health insurance premiums in the non-group market.

Next week, Deloitte will produce a detailed summary of the AHCA as amended and passed by the House.

Next steps

Congressional Republicans are using the budget reconciliation process to move the AHCA forward and to make it possible for the Senate to consider and pass the AHCA with a simple majority of 51 votes, rather than 60 votes generally needed to bring legislation up for a vote under Senate rules. As a result, the provisions of the legislation must meet strict criteria as to whether the provisions of the bill are related to the federal budget deficit, taxes or the federal debt limit. The Senate parliamentarian will review any challenges to specific provisions in the legislation and rule on whether the provision can be included in the reconciliation bill or will have to be removed. The Senate Parliamentarian will not review the legislation until the Congressional Budget Office (CBO) provides its analysis of the bill’s effects on the federal budget deficit and health insurance coverage. The CBO has said it would have its analysis of the bill, incorporating the new amendments, completed the week of May 8 or May 15, 2017.

Once a CBO score is received and if the AHCA is cleared by the Senate parliamentarian to meet the budget reconciliation criteria, the Senate could take up the bill. The Senate is likely to make changes to the underlying bill in order to satisfy Senate budget rules, as well as any policy changes needed to achieve 51 votes to pass in the Senate. The AHCA, as amended by the Senate, would then go back to the House for a final up or down vote. The Senate and House could also convene a conference committee to negotiate final legislative language if necessary. All of this would occur before the AHCA could be sent ultimately to President Trump for signature into law.

Authors:

Anne Phelps
Principal | Deloitte Risk and Financial Advisory
US Health Care Regulatory Leader
Deloitte & Touche LLP
Latest conversations from Anne Phelps on Twitter

Daniel Esquibel
Senior Manager | Deloitte Risk and Financial Advisory
Deloitte & Touche LLP

This document contains general information only and Deloitte is not, by means of this document, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This document is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this document.

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