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House Republicans Repeal Obamacare

The floor of the U.S. House chamber is shown in this video grab as the House of Representatives voted on the American Healthcare Act, to repeal major parts of Obamacare and replace it with the Republican healthcare plan, on Capitol Hill in Washington, U.S., May 4, 2017.  U.S. House TV/Handout via Reuters
Daniel Pyne on May 4, 2017 - 2:21 pm in News & Insights

Republican efforts to repeal and replace the Affordable Care Act, commonly known as Obamacare, has passed through the House of Representatives in a narrow final vote of 217 to 213.

The vote occurred on May 4, shortly after 2:20 PM.

The bill must now move to the Senate, where Republican control is a slim 52 – 48 majority. This means they can afford to lose fewer votes than in the House, which could ultimately lead to more concessions and revisions to the bill.

While the House was confident in today’s result before the vote, no such confidence exists on the Senate side.

“I know the members of the Senate have lots of amendments,” said Sen. John Barrasso, (R-WY), a member of the GOP leadership and physician. “This is going to be an open process on the Senate floor, so we’re working to get to yes.”

Senate deliberation of the bill is expected to take much longer than the debate the bill received in the House. Senator Bob Corker (R-SC) expects the measure to take at least a month.

“People over here want to make sure it’s something that’s going to work for the American people,” Corker told the Washington Examiner.

What’s the Same, What’s Different

The American Health Care Act, in its current form, would repeal 14 of the 21 taxes and other devices in the bill to fund the system created by the ACA, these include:

  1. The employer mandate
  2. The individual mandate
  3. A 10 percent tax on indoor tanning services
  4. A 2.3 percent sales tax on medical devices
  5. A limit on the ability to purchase over-the-counter medication with HSAs, Archer MSAs, and FSAs
  6. An increase in the penalty for improper withdrawal of funds from HSAs and Archer MSAs.
  7. A limitation on the use of FSAs as part of cafeteria plans.
  8. A tax on health insurance providers
  9. A tax on pharmaceutical companies
  10. The Net Investment Income Tax which adds a 3.8 percent surtax on capital gains, dividends, interest, from households with over $250,000.
  11. The Additional Medicare Tax which creates a 0.9 percent surtax on wages and salaries earned by households with over $250,000 for couples filing jointly
  12. A limit on the deductibility of salaries paid to health insurance executives
  13. A limitation on the ability of businesses to deduct expenses subsidized by Medicare Part D.
  14. A rule that households may only deduct medical expenses over 10 percent of their income. The bill would return this threshold to 7.5 percent of household income.

However, the House Republicans healthcare bill would leave the following in place:

  1. The Cadillac Tax, a 40 percent excise tax on high-cost healthcare plans, but it is delayed from 2018 to 2025.
  2. The proper implementation of the economic substance doctrine, a long-standing common law rule intended to discourage tax evasion.
  3. The Patient-Centered Outcomes Research Fee (PCORI), a fee on to fund a federal research center that was originally set to expire in 2019.
  4. Requirements on tax-exempt hospitals
  5. Requirements on Blue Cross and Blue Shield organizations that receive tax benefits
  6. A requirement that employers report the value of health benefits on their employees’ W-2

What This Means Moving Forward

Today’s bill aims to repeal most of the taxes created by the ACA like the individual mandate penalty for not having insurance. The bill would also slash Medicaid funding and roll back its expansion created by the ACA.

The recent events surrounding the healthcare debate shows the difficulty of creating a healthcare system everyone agrees too. Moderate republicans – during both the last attempt and the lead up to this one – were wary of voting because they worried it would leave too many individuals with pre-existing conditions without coverage. At the same time, the conservative Republicans in the House Freedom Caucus didn’t support the original bill because it didn’t remove enough of the ACAs mandates.

Both sides have come to a compromise: Adding $8 billion to create high-risk pools for people with pre-existing conditions, while allowing states the choice to waive some of the ACA provisions if they can prove they are increasing access to care while doing so. This $8 billion pool will not be enough to cover all of these individuals for 5 years and will affect some people you would not expect. 

A stark difference between this proposal and the previous one is the lack of assessment from the Congressional Budget Office (CBO). During March’s attempt, the CBO reported the plan would ultimately save money, but at the cost of approximately 24 million Americans losing their insurance coverage. This results sparked outrage and left many members of the House cautious to vote on the proposal.  This time, however, members of the House will be voting on the bill without a CBO report.

“Forcing a vote without a CBO score shows that Republicans are terrified of the public learning the full consequences of their plan to push Americans with pre-existing conditions into the cold,” said House Minority Leader Nancy Pelosi in a statement.

The fight over this bill is far from over! There are still hurdles to cross in the ongoing healtcare debate.

“It’s too early to spike the football,” said Ben Conley, an employee benefits attorney with Seyfarth Shaw and faculty member for the Certified Healthcare Reform Specialist course. “We still have a long way to go.  This is not a repeal, this is an amendment. From a CHRS perspective, this more than anything validates the need for the program. The CHRS program keeps people abreast of changes, which is why you need it now.”

Photo Credit – Copyright: notebook / 123RF Stock Photo

Healthcare Reform Magazine will follow this bill, as well as any changes that arise as the bill continues to evolve. Be sure to check back regularly and follow us on Facebook and LinkedIn to receive the latest updates as they happen.

Need a more thorough look at healthcare reform? Check out the Certified Healthcare Reform Specialist® designation to learn what you need to know to comply with healthcare reform, regardless of if it’s the ACA or AHCA.


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