Other names for this bill
This bill often is referred to as the AHCA (acronym for American Health Care Act).
Because of the complicated way this bill has been discussed and modified in both the House of Representatives and the Senate, we are documenting three versions. Two were preliminary ones considered by each house of Congress.
o The version originally considered by the Senate, named the Better Care Reconciliation Act (BCRA). It did not receive enough support in the Senate to pass.
The third is the bill the Senate agreed on July 25 to debate. It is the only version that has a chance to become law. if passed by the Senate, it will need to be reconciled with the House through a conference committee.
Click here for our discussion of that version (also named the American Health Care Act).
This would become the nation's health care policy
For the past four years, the Patient Protection and Affordable Care Act (Obamacare) has been our national health care policy. This bill would replace that.
In the sections below, we'll explain what the law would do. For an explanation of how changes would effect you, see our discussion of this issue.
Some Obamacare provisions would remain
There are a few features of Obamacare that would remain in the AHCA....
o Policies still would need to cover essential health benefits.
o Children under age 26 would be able to remain covered under a parent's policy.
o You could not be denied coverage or charged more for pre-existing conditions (though those with pre-existing conditions likely would end up paying much more).
States could opt out of several of these protections
An amendment to the bill by Rep. Tom MacArthur would allow states to waive some of these key protections.
Essential Benefits
States would be allowed to exempt insurance companies from providing those benefits. The amendment states that the purpose of the waiver would be to either...
o Increase the number of people with healthcare coverage
o "Advance another benefit to the public interest in the state"
The rule would give the federal government two months to reject the waiver - otherwise it would be automatically granted.
Pre-existing conditions
States would be allowed to charge higher premiums to those with pre-existing conditions who have gone a period of time without coverage if a high-risk pool was available.
Assistance would be based on age
The AHCA would provide assistance to pay for health care insurance by refundable tax credits.
The amount of the credit you would be eligible for would depend only on your age...
| Under 30 | $2,000 |
| 30 - 40 | $2,500 |
| 40 - 50 | $3,000 |
| 50 - 60 | $3,500 |
| 60 and over | $4,000 |
Assistance would be reduced for individuals who earn more than $75,000 in a year.
Each year, the amount of the subsidy would increase - tied to the Consumer Price Index (CPI). The cost of health care, however, has been increasing faster than the overall cost of living. So with each year the amount of your subsidy would cover less and less of your health care costs.
Premiums would be more sensitive to age
The ACHA would allow insurance companies to adjust premiums based on the age of the insured person. The maximum an older person could be charged is 5 times the amount charged to a younger person (states could restrict that).
Note the effect on older people. While the AHCA allows premiums for older people to cost five times as much as those for younger people, the amount of assistance an older person would receive is only twice as much as for a younger person.
You no longer would be required to buy insurance
This bill would eliminate the requirement that virtually everyone obtain health care insurance that meets standards established by the law (referred to under Obamacare as the mandate .
The AHCA would attempt to encourage people to have insurance by allowing insurance companies to charge a penalty to those who have not been covered for two or more months and who later apply. The penalty would be an additional 30 percent of the premium cost for a year. Once somebody had been uninsured for two months, it wouldn't matter how much longer they remain uninsured. The penalty still would be limited to one year.
Medicaid would be scaled back drastically
This bill would phase out Obamacare's Medicaid Expansion program.
Those who live in states that have expanded Medicaid and who are in the program as of 2020 will be able to remain covered by Medicaid Expansion as long as their income remains below the poverty level. The federal government would not pay to cover new people under the program. Also, if someone currently covered by Medicaid Expansion becomes ineligible for more than a month after 2020, that person would not be able to receive the coverage again.
In other words, the Medicaid Expansion program would be phased out by attrition.
Medicaid itself would change too. States currently are reimbursed for Medicaid expenses based on how much they spend. Under the AHCA, the federal government would provide a set amount - such as a per capita amount or a a block grant - to states to pay for Medicaid.
Money saved would go to the wealthiest
By cutting benefits that Obamacare provides, the federal government would spend about $1 trillion less in the next 10 years under the AHCA.
That isn't how much more money we'll have though, as the bill also cuts out about $900 billion of revenue. That revenue was part of Obamacare and was being used to help pay for the law's provisions.
o Obamacare added a 3.8 percent Net Investment Income Tax for individuals with incomes greater than $200,000.
o Companies can deduct from their taxable income salaries they pay executives up to $1 million per executive. Obamacare limited that deduction for healthcare-related companies to earnings under $500,000. The AHCA would remove that restriction, allowing those companies larger tax cuts and eliminating a disincentive for them to pay executives more than $500,000 a year.
o Annual fees on pharmaceutical manufacturers and insurance companies would be eliminated.
o Tax penalties collected from those who don't purchase required insurance (Mandate tax) were used to keep prices lower. They no longer will be collected.
No money for Planned Parenthood and abortions
In order to receive the assistance to pay premiums that we explained above, any insurance plan purchased cannot include coverage for an abortion.
Also, the AHCA would prohibit any federal money being given to Planned Parenthood.
Most provisions would not take effect immediately
Some provisions of this bill, such as eliminating the mandate to buy insurance, would take effect immediately.
Most provisions of the bill, including the changes to assistance and Medicaid, would not fully take effect until 2020.
The Senate cannot filibuster this bill
Congress is using the budget reconciliation process to attempt to pass this bill. That makes it immune from a filibuster in the Senate.
For more information...
Click here to read the Congressional Budget Office analysis of the AHCA.
Disposition
This bill expired when the 115th Congress ended in Jan. 2019.