The American Health Care Act of 2017 (H.R. 1628), referred to by the acronym AHCA and nicknamed variously as Trumpcare, Ryancare, Republicare, and pejoratively as Obamacare-Lite and Wealthcare, is a United States Congress bill to repeal the Patient Protection and Affordable Care Act (ACA). It is based on a plan first publicly released by House Republicans on March 6, 2017, and the first part of what its proponents claim is a three-phase plan to repeal the act.
The AHCA is a budget reconciliation bill that is part of the 2017 federal budget process; this status means that it cannot be filibustered in the United States Senate and can thus pass the Senate with a simple majority of votes. It would repeal the parts of the Affordable Care Act within the scope of the federal budget, including provisions contained within the Internal Revenue Code such as the "individual mandates" (in Sec. 205), employer mandates (in Sec. 206) and various taxes (Section 201 et. seq.), and also modifications to the federal Medicaid program (in Sections 111-116 and 121). The Congressional Budget Office projects that the AHCA would increase the number of uninsured people by 23 million over 10 years, but would decrease the federal budget deficit by $119 billion over the same period, largely by cutting Medicaid coverage for poorer Americans. The House AHCA bill would cut taxes for the wealthiest Americans. Insurance premiums are projected to decrease for younger, healthier, and wealthier people, while older and poorer people would see their premium increase.
On May 4, 2017, the United States House of Representatives voted to pass the American Health Care Act (and thereby repeal most of the Affordable Care Act) by a narrow margin of 217 to 213, sending the bill to the Senate for deliberation. The Senate has indicated they will write their own version of the bill, instead of voting on the House version. Senate Republicans have approached the AHCA with an unprecedented level of secrecy; a group of 13 Republican Senators is drafting the legislation in private, without hearings and without releasing the legislative drafts to the public, raising bipartisan concerns about a lack of transparency.
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Background
The ACA, a major reform of health care in the United States, was passed by the 111th United States Congress and signed by President Barack Obama in 2010. At the time, both houses of Congress and the presidency were controlled by the Democratic Party. During the 2012 presidential election, Republican nominee Mitt Romney, running against Obama, promised to repeal the ACA. After Romney's defeat, the ACA remained in effect for the duration of Obama's presidency despite Republican efforts to repeal it. In the 114th United States Congress, Republicans passed a bill that would have repealed much of the ACA, but the bill was vetoed by President Obama. After winning the 2016 presidential election, President Donald Trump promised to "repeal and replace" the ACA with a new law. The 2016 elections left Republicans in control of the executive and legislative branches of the U.S. government, but with fifty-two seats in the one-hundred member Senate, Republicans would still have to rely on at least some Senate Democrats to overcome a filibuster. However, Senate rules provide for a special budget rule called reconciliation, which allows certain budget-related bills to bypass the filibuster and be enacted with a simple majority vote. Republican leaders were seeking to pass the AHCA through the Senate by using the reconciliation rule.
Overview
The act would have allowed states to continue to enroll persons in the ACA Medicaid expansion through January 1, 2020, and would disallow further enrollment after that date. The AHCA will include age-based tax credits for those who earn less than $75,000, or $150,000 for joint filers. The bill would have required insurance companies to cover pre-existing conditions. The AHCA used a standard of 'continuous coverage', defined by a 63-day coverage gap, where an individual who currently has insurance and is changing insurers will not pay a higher rate with their new insurer. Individuals who wished to buy insurance but were outside of the coverage gap would have paid a 30 percent premium surcharge for one year and then return to standard rates. Both healthy and the sick were required to pay the surcharge, which may have caused healthier persons to remain outside of the market, causing overall health care costs to rise (see adverse selection, risk pool).
Views of experts
Health care experts from across the political spectrum-- liberal, moderate, and conservative --agreed that the House Republican health care bill was unworkable and suffered from fatal flaws, although specific objections varied depending on ideological perspective. Experts agreed that the bill fell far short of the goals laid forth by Trump --"Affordable coverage for everyone; lower deductibles and health care costs; better care; and zero cuts to Medicaid"--because the bill was (1) "almost certain" to reduce overall health care coverage and increase deductibles and (2) would phase out the Medicaid expansion.
Among the key concerns identified by health-care experts were that (1) the tax credits funded at the level proposed in the bill are insufficient to pay for individual insurance, and could lead to Americans dropping out of the health care market; (2) the bill's elimination of the ACA's community rating provision (barring insurance companies from charging older people more than three times what they charge younger people) would increase cost disparities between age groups and would increase premiums for Americans more prone to illness; (3) the dropping of healthy people from the health insurance market (adverse selection) could lead to insurer "death spirals" that would decrease choice; and (4) the phaseout of the Medicaid expansion was likely to result in a loss of healthcare for poorer Americans.
Health coverage and budget analysis
Original version
CBO estimates
The non-partisan Congressional Budget Office (CBO) released its score (analysis) of the bill on March 13, 2017, concluding that:
- Persons with healthcare insurance coverage would be reduced by 14 million in 2018, 21 million in 2020, and 24 million in 2026 relative to current law. In 2018, most of the reduction would be caused by the elimination of the penalties for the individual mandate, both directly and indirectly. Later reductions would be due to reductions in Medicaid enrollment, elimination of the individual mandate penalty, subsidy reduction, and higher costs for some persons.
- The AHCA would reduce the deficit relative to current law by $337 billion over a decade. Approximately $1.2 trillion less would be spent over that time, while $900 billion less in tax revenue would be collected. Medicaid spending would be cut considerably. Taxes on the roughly top 5% of income-earners under current law would considerably drop.
- In negotiations after the initial report, the law was modified such that the CBO estimated the deficit reduction would total about $150 billion over a decade.
- Insurance premiums would rise initially relative to current law, but would be reduced in the future moderately: "Starting in 2020, the increase in average premiums from repealing the individual mandate penalties would be more than offset by the combination of several factors that would decrease those premiums: grants to states from the Patient and State Stability Fund (which CBO and JCT expect to largely be used by states to limit the costs to insurers of enrollees with very high claims); the elimination of the requirement for insurers to offer plans covering certain percentages of the cost of covered benefits; and a younger mix of enrollees. By 2026, average premiums for single policyholders in the nongroup market under the legislation would be roughly 10 percent lower than under current law...."
- Premium changes would vary significantly by age: "Under the legislation, insurers would be allowed to generally charge five times more for older enrollees than younger ones rather than three times more as under current law, substantially reducing premiums for young adults and substantially raising premiums for older people." This would lead to a mix of younger enrollees, one of the reasons for the lower overall premiums over the longer-term.
- Under both current law and the AHCA, CBO assumes the health exchange marketplaces would remain stable (i.e., no "death spiral").
- Social Security expenditures would decrease due to earlier mortality: "CBO also estimates that outlays for Social Security benefits would decrease by about $3 billion over the 2017-2026 period."
- Medicaid expenditures would increase due to reduced access to birth control. "By CBO's estimates, in the one-year period in which federal funds for Planned Parenthood would be prohibited under the legislation, the number of births in the Medicaid program would increase by several thousand, increasing direct spending for Medicaid by $21 million in 2017 and by $77 million over the 2017-2026 period."
The Congressional Budget Office released an updated analysis of the bill, including changes found in several amendments on March 23, 2017, concluding that:
- The updated bill would have similar effects on health insurance coverage, differing by no more than half a million in any category in any year over the next decade.
- The bill's impact on health insurance premiums would be approximately the same as was previously estimated.
- The proposed amendments would reduce federal deficits by $150 billion over a decade, compared to $337 billion previously.
- Changes to the Medicaid program would reduce the estimate of savings by $41 billion over a decade.
Other estimates
Outside organizations have published analyses of the effect of AHCA passage:
- Prior to the CBO's analysis was published, the Brookings Institution presented a prediction of the budget office's review, based on prior analyses. It predicted the CBO would find the number of uninsured Americans could increase by 15 million over 10 years. The Brookings prediction also estimated that at least 6 million would lose coverage from the public exchange; 2 million from employer coverage; and 7 million currently covered under Medicaid.
- A Standard & Poor's analysis projected that under the AHCA as introduced, the insured population would decrease by 6 and 10 million Americans by 2024, with a 2 to 4 million person decline in individual coverage and a 4 to 6 million person decline under Medicaid. The analysis also projected increased affordability for the younger population, decreased affordability for the older population, and increased profitability for private insurers.
- David Cutler, professor of applied economics at Harvard University and former administrator at the National Institutes of Health, believed that this figure could be even higher, as many as 20 million people.
- Two reports from the Center for Budget and Policy Priorities concluded that the ACHA would have shifted $370 billion in Medicaid costs to the states, which would have then be forced to cut coverage and services, and would make health insurance far less affordable in high-cost states, particularly 11 states in which tax credit would have been more the halved.
- According to a report viewed by Politico, the White House Office of Management and Budget's own analysis of the AHCA estimated that 26 million people would under AHCA lose coverage over the next decade. According to White House Communications Director Michael Dubke, the analysis tried to use similar methodology as the CBO.
Revised version
CBO estimates
The CBO released its score of the revised bill on May 24, 2017, concluding that:
- Persons with healthcare insurance coverage would be reduced by 14 million in 2018, 19 million in 2020, and 23 million in 2026 relative to current law.
- The AHCA would reduce the deficit relative to current law by $119 billion over a decade. Approximately $1.111 trillion less would be spent over that time, while $992 billion less in tax revenue would be collected. Medicaid spending would be cut considerably. Taxes on the roughly top 5% of income-earners under current law would considerably drop.
Office of the Actuary
The Chief Actuary of Centers for Medicare and Medicaid Services of the Department of Health and Human Services released a report on June 13, 2017 providing their estimates of the legislation's impact.
- Persons with healthcare coverage would be reduced by 4 million in 2018 and 13 million by 2026.
- Gross premiums would decrease by 13%, but net premiums, the amount paid by consumers after federal subsidies, would increase by 5% by 2026.
Other estimates
Outside organizations have published analyses of the effect of the AHCA:
- According to researchers at the Milken Institute School of Public Health at George Washington University, the legislation would lead to a loss of 924,000 jobs by 2026.
- According to a report published by the Center on Budget and Policy Priorities, the legislation would lead to 3 million more children under 18 years old to lose healthcare coverage.
History
Initial version
The two bills that constituted the AHCA were introduced into the House Energy and Commerce Committee and the House Ways and Means Committee on March 8, 2017 and passed both committees the next day. Both committees approved the AHCA on a party-line vote without a CBO report, prompting criticism from Democrats. House Minority Leader Nancy Pelosi argued that the bill should not proceed through Congress until the CBO completed its analysis of the bill. Representative Richard Neal, the ranking Democratic member of the House Ways and Means Committee, stated: "To consider a bill of this magnitude without a CBO score is not only puzzling and concerning, but also irresponsible." Trump administration officials, including budget director Mick Mulvaney and economic adviser Gary Cohn, preemptively attacked the CBO, with Cohn saying that the CBO's score would be "meaningless". These criticisms from the White House are unusual: prior administrations of both parties had refrained from questioning the CBO's credibility, and many members of Congress respect the CBO as a neutral body.
The bill next went to the House Budget Committee, which passed it on March 16 by 19 to 17 votes, with three Republicans from the conservative Freedom Caucus joining Democrats in opposition. It next went to the Rules Committee, which sets the terms of the debate before a bill comes to the full House. A House vote was initially scheduled for March 23, but was delayed for at least a day after Republican leaders were unable to find enough votes for passage. On March 24, with both moderate and far-right Republican lawmakers opposing the bill, Speaker Ryan and President Trump chose to withdraw the bill from consideration rather than go through with a full House vote that would have failed.
The comparatively "lightning fast" legislative movement for the AHCA through the House was in contrast to the Affordable Care Act, which took months of negotiations, committee markup, and debate before passage in 2010. The quick process prompted complaints from Democrats "that the Republicans were rushing to approve a repeal bill without hearing from consumers, health care providers, insurance companies or state officials -- and without having estimates of the cost or the impact on coverage from the Congressional Budget Office".
In House committees, Democratic representatives offered more than 100 amendments to the legislation, including amendments that "would have required the law to guarantee no one would lose insurance, hospitals would not see an increase in uncompensated care, the deficit would not increase, taxes would not go up on people making less than $250,000, and that people over 55 years old would not lose benefits or pay higher out-of-pocket costs." Democratic Representative Joe Crowley of New York offered an amendment that during the 2010 Affordable Care Act debate had been proposed by Republican Representative Kevin Brady of Texas, requiring "that the bill be posted online for 72 hours before any votes were taken on it, and that every member put a statement in the Congressional Record stating he or she had read the bill." All of these Democratic amendments were rejected, as Brady (the chairman of the House Ways and Means Committee) ruled that the amendments were "not germane" to the bill, and the Republican majority repeatedly upheld these rulings.
Division among House Republicans
In the days leading up to the vote, which was originally scheduled for March 23, 2017, there was increased division among House Republicans over the replacement, causing concerns among Republican Party leadership over having the votes needed to pass the bill. Among Republican defectors from the bill, the largest opposition came from members of the House Freedom Caucus, which consists of some of the most conservative members in the House. The Freedom Caucus members, among their primary objections to the bill, were not convinced that the healthcare replacement effectively abolished some elements of the Affordable Care Act, most prominently the essential health benefits. To achieve success in the House, Republicans could not afford more than twenty-one members of their own party voting against the bill, and several days before the vote, dissent within the party, largely from the Freedom Caucus, was a significant threat to its passage. Beyond the conservative members of the Freedom Caucus, there was continued opposition to the bill from more moderate Republicans in the House, such as from members of the center-right Tuesday Group, where there were concerns about loss of coverage and the potential of rising insurance costs.
Amid the division between the Republicans, the party leadership, which was led by House Speaker Paul Ryan, attempted to ease concerns among the Freedom Caucus and others. President Trump also held numerous meetings with Republicans in the House leading up to the vote, though after negotiations with the Freedom Caucus over the ACA's essential health benefits, there was still a considerable amount of opposition from moderates and members of the Freedom Caucus alike. On the day of the scheduled vote, which coincided with the seven-year anniversary of the ACA's signing into law, party leadership continued to struggle with getting the required votes for the bill, and the vote was rescheduled for the following day, March 24, 2017, as requested by the White House.
Withdrawal ahead of vote
The night before the rescheduled vote, President Trump, in a final effort to negotiate with those opposing the bill, announced to the House Republicans that the vote the following day would be their only chance to repeal the Affordable Care Act, a goal long sought after by Republicans in Congress. The following morning the bill was brought to the House floor after being approved by the House Rules Committee for four hours of debate preceding the vote, which was expected in the afternoon. It was reported that a couple hours before the expected vote, Ryan made a sudden visit to the White House to meet with Trump, in which Ryan told Trump that the bill did not have enough votes to pass in the House. Shortly after the time of the expected vote it was announced that the Republicans were withdrawing the AHCA from consideration, a decision made after Ryan met with Trump. Following the withdrawal, Ryan stated in a press conference that the country is "going to be living with Obamacare for the foreseeable future", while Trump said that it was tough to pass the bill without support from Democrats; Ryan and Trump both said they were going to move forward on other policy issues.
Revised version
MacArthur Amendment
In April 2017, House Republicans tried to reconcile their divisions with the proposed MacArthur Amendment. The MacArthur Amendment, developed by Representative Tom MacArthur of the Tuesday Group (representing more moderate Republicans) and Representative Mark Meadows of the House Freedom Caucus (representing the hard-line right). The language of the proposed amendment became available on April 25, 2017. The amendment allows insurers to charge enrollees in their 50s and early 60s more than younger enrollees. It also allows states to waive essential health benefits and certain sections of the community rating program. As revised by the MacArthur Amendment, the ACHA weakens protections for patients with preexisting conditions; under this version of the bill, insurers would be able to charge people significantly more if they had a pre-existing condition.
Passage in House
On May 3, House Republicans announced that they had enough votes to pass the bill, after amending it to include an additional $8 billion over five years to subsidize insurance for people with pre-existing conditions. On May 4, 2017, the House of Representatives voted in favor of repealing the Patient Protection and Affordable Care Act and passing the American Health Care Act with a narrow vote of 217 to 213. 217 Republican Congressmen voted for the bill, while all 193 Democrats and 20 Republicans voted against it. Most of the Republicans who voted against the bill are members of the centrist Tuesday Group, and only one member of the Freedom Caucus voted against the bill.
Reaction
Initial version
President Trump endorsed the bill after its release, calling it "our wonderful new Healthcare Bill" on Twitter. Speaker of the House Paul Ryan referred to the bill as a "conservative wish list" that would provide for "monumental, exciting conservative reform". Economist Douglas Holtz-Eakin described the AHCA as "a good start".
But conservative members of the Republican Party quickly raised skepticism about the proposed reform as they would prefer a complete repeal of the PPACA. The White House sent Mick Mulvaney, executive of the Office of Management and Budget, to convince members of the House Freedom Caucus to support the legislation. According to numerous reports, Mulvaney was unsuccessful. Shortly after the meeting caucus chairman Mark Meadows said, "No new position tonight. Our position is the same. We believe we need to do a clean repeal bill."
A number of conservative groups have also criticized the bill for not being enough of a repeal, calling it "Obamacare 2.0". The Koch brother-supported organizations Americans for Prosperity and Freedom Partners have indicated their intention to put together a multi-million dollar fund in support of re-election campaigns for conservative lawmakers who take a stand against the bill.
The AARP released a statement opposing the bill. Stating, "On top of the hefty premium increase for consumers, big drug companies and other special interests get a sweetheart deal". The American Medical Association released a statement opposing the bill. America's Essential Hospitals, American Hospital Association, Association of American Medical Colleges, Catholic Health Association of the United States, Children's Hospital Association, Federation of American Hospitals, and National Association of Psychiatric Health Systems also stated their opposition in a joint letter. Conservative groups, including Heritage Action, the Cato Institute, Americans for Prosperity, FreedomWorks, and the Tea Party Patriots all oppose the bill.
Progressive groups, including MoveOn.org, American Bridge, the Center for American Progress, and Our Revolution, were resolutely opposed to the bill, as expected. Economist and New York Times columnist Paul Krugman stated that the bill's "awfulness is almost surreal", writing that what Republican congressional leadership "came up with instead was a dog's breakfast that conservatives are, with some justice, calling Obamacare 2.0. But a better designation would be Obamacare 0.5, because it's a half-baked plan that accepts the logic and broad outline of the Affordable Care Act while catastrophically weakening key provisions." On March 23, 2017 (the seventh anniversary of ACA and one day prior to the vote on the American Health Care Act), former President Obama hailed the successes of the Affordable Care Act, including 20 million more Americans insured, preexisting conditions covered, young people staying on their parents' plans until 26, lowered costs for women's health care and free preventive care.
Later versions
After the House passed the AHCA, but before any legislation passed the Senate, Republican congressmen gathered with President Trump to celebrate in the Rose Garden. In his speech, Trump described the bill as "very incredibly well-crafted." Republican Senators expressed less enthusiasm about the bill and opted to draft their own bill instead of taking up the House's version. Congressional Democrats and interest groups, such as the AARP, American Medical Association, ACLU, and Planned Parenthood, expressed their opposition to the bill.
At a lunch with Senate Republicans in June 2017, President Trump reportedly called the AHCA "mean, mean, mean" and a "son of a bitch". He reportedly implored the Senators to make their version of the bill more "generous, kind, [and] with heart.
On June 16, 2017, a bipartisan group of seven current Governors sent a letter to Senate Majority and Minority Leaders Mitch McConnell and Chuck Schumer criticizing the House's legislation and requesting a bi-partisian effort in the Senate to reform healthcare. The signatories include Governors John Kasich (Ohio), Steve Bullock (Montana), Brian Sandoval (Nevada), John Bel Edwards (Louisiana), John Hickenlooper (Colorado), Charlie Baker (Massachusetts), and Tom Wolf (Pennsylvania).
According to MIT political scientist Christopher Warshaw and Stanford political economist David Broockman, national polls show that AHCA "is the most unpopular piece of major legislation Congress has considered in decades", more so than TARP ("the bailout") and much more unpopular than the Affordable Care Act (Obamacare). Their estimates of survey results indicate that there is not majority support for the bill in any state.
Public opinion polling
The following are the results of polls of the public opinion of the AHCA.
Comparison between ACA and AHCA
This table describes major differences and similarities between the ACA, the AHCA as considered in the House in March 2017, and the AHCA as passed by the House on May 4, 2017.
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