The AHCA vs. the ACA:Health Care Reform in 2017

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Caitlin BronsonContent Writer at Zane Benefits

@caitlinbronson

Amanda GiacobassiInbound Marketing Manager at

Zane Benefits@amanda_giacobas

Presenters

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Agenda● The background of the AHCA● What’s staying from the ACA

○ Waivers○ High-risk pools

● What’s changing from the ACA○ Mandates○ Subsidies○ Premium tax credits○ Medicaid○ Tax reform○ Small business tax credit

● What’s the bottom line? CBO scoring● What are the next steps for the bill?

○ Senate concerns○ Medicaid○ Special interests○ Timing

● What’s next for small businesses?● Q&A

BackgroundThe bills that would become the American Health Care Act originated in House Energy and

Commerce Committee and the House Ways and Means Committee on March 8, 2017.

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March 8, 2017 April 27, 2017 May 4, 2017

The path to passage

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What stayed from the ACA?

Ban on limits for essentialhealth benefits

Guaranteed issue and renewability of coverage

Coverage for adult children

Age rating restrictions

Requirements to coverpre-existing conditions

Ban on health status underwriting

Restrictions on discriminationCost-sharing limits on essential health benefits(for nongrandfathered plans)

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WaiversStates can apply for waivers for some of the provisions that stayed from the ACA.

The federal government would have 60 days to approve the waivers.

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Age rating restrictions Essential health benefits

Health status underwriting

(community rating)

5:1

Waivers (continued)

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Funding for high-risk individualsThe Patient and State Stability Fund● $115 billion over 9 years → all states

○ $15 billion over 9 years → Federal Invisible Risk Sharing Program● Additional $8 billion over 5 years → states with community rating waivers

Rules for state use● Provide financial help to high-risk individuals● Promote access to preventive services● Provide cost-sharing subsidies● Establish a high-risk pool● Establish a reinsurance program

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What changes under the AHCA?

Rolling back several ACA taxes

Removing the ACA’s small business tax credit

Eliminating the employer and individual mandates

Scaling back health insurance subsidies

Enhancing Health Savings Accounts (HSAs)

Defunding Medicaid expansion and altering the program

Altering premium tax credits for the Small Business HRA (QSEHRA)

Eliminating the employer and individual mandates

● Employer and individual mandates repealed

● Penalty relief retroactive to 2016● Lapsed coverage fee implemented

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Scaling back health insurance subsidies

Repeal● Premium tax credits to low-income individuals● Cost-sharing reductions to low-income individuals

Replace● Monthly tax credit to everyone depending on age and family status

○ Tax credit phased out at $75,000 for individuals and $150,000 for families

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Participants in a Small Business HRA formerly had to check whether their monthly allowance counted as “affordable coverage.”

The AHCA eliminates that need. Participants only need to make sure their tax credit is reduced by the amount of their HRA allowance.

Altering premium tax credits for the Small Business HRA

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ACA Medicaid expansion phased out as of 2020.Medicaid is no longer an open-ended entitlement.● States can either convert to block grant or accept limits on funding.

Medicaid reimbursement to Planned Parenthood suspended for one year.Work requirement imposed on nondisabled, nonelderly, and nonpregnant adults.States can apply for waivers to limit Medicaid.

Defunding Medicaid expansion and altering the program

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Increasing contribution limits ● 2017: $3,400 for self-only coverage, $6,750 for family● 2018: $6,550 and $13,100

Allowing spousal catch-up contributions to the same HSAAllowing disbursement on the day an HDHP goes into effect

Enhancing Health Savings Accounts (HSAs)

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Delayed● The 40% Cadillac tax (to 2026)

Reduced● HSA taxes● Medical expense deduction

income to 5.8%

Repealed● Investment income tax: 3.8%● FSA contribution limit: $2,500● High-income Medicare tax: 0.9%● Medicare Part D subsidy

coordination● Medical devices excise tax: 2.3%● Indoor tanning tax: 10%

Rolling back several ACA taxes

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AHCA repeals the small business tax credit in 2020.

Small businesstax credit

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The Congressional Budget Office (CBO) released its assessment of the AHCA on May 24, 2017. Here are the findings. The AHCA would:● Reduce the federal deficit by $119 billion over 10 years.● Increase the number of uninsured by 23 million by 2026.● Decrease the number of people covered by employer-sponsored health insurance by

3 million by 2026.● Half of Americans would live in states that seek more than one waiver.● Lower average premiums, except for older, lower-income Americans.

What’s the bottom line?

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Changes expectedSenators are already positive that the AHCA will undergo several changes before it’s passable in the Senate. The day the bill passed in the House, Senator Lindsey Graham tweeted:

Next steps with the legislation

“A bill -- finalized yesterday, has not been scored, amendments not allowed, and 3 hours final debate -- should be viewed with caution.”

@LindseyGrahamSC

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Senate concerns

Medicaid likely to be less affected

Individual health insurance subsidies likely

to be more generous

More protections for individuals with

pre-existing conditions

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Senate Split

48 Democrats 52 Republicans

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Timing

Informal September deadline

Midterm elections in 2018 are looming

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3 million individuals are expected to lose employer-sponsored coverage with the AHCA.

Alternative benefits will become more prominent, such as: 1. HSA contributions2. Small Business HRA3. Ancillary benefits (accident, dental, etc.)

What’s next for small businesses?

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Q&A

Thank you.