In January 2017, the House and Senate adopted a budget resolution for FY2017 (S.Con.Res. 3), which reflects an agreement between the chambers on the budget for FY2017 and sets forth budgetary levels for FY2018-FY2026. S.Con.Res. 3 also includes reconciliation instructions directing specific committees to develop and report legislation that would change laws within their respective jurisdictions to reduce the deficit. These instructions trigger the budget reconciliation process, which may allow certain legislation to be considered under expedited procedures. The reconciliation instructions included in S.Con.Res. 3 direct two committees in each chamber to report legislation within their jurisdictions that would reduce the deficit by $1 billion over the period of FY2017 through FY2026. In the House, the Committee on Ways and Means and the Energy and Commerce Committee are directed to report. In the Senate, the Committee on Finance and the Committee on Health, Education, Labor, and Pensions are directed to report.
On March 6, 2017, the Committee on Ways and Means and the Energy and Commerce Committee independently held markups. Each committee voted to transmit its budget reconciliation legislative recommendations to the House Committee on the Budget. Combined, these two bills are referred to as the American Health Care Act (AHCA). The House Committee on the Budget is scheduled to mark up the AHCA on March 16, 2017.
The AHCA includes a number of provisions that would repeal or modify parts of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) and a number of provisions that do not specifically relate to aspects of the ACA. This report contains three tables that, together, provide an overview of the AHCA provisions. Table 1 includes provisions that apply to the private health insurance market, Table 2 includes provisions that affect the Medicaid program, and Table 3 includes provisions related to public health and taxes. Each table contains a column identifying whether the AHCA provision is related to an ACA provision (e.g., whether it repeals an ACA-related provision).
The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) estimate that the AHCA would reduce federal deficits by $337 billion over the period FY2017-FY2026. With respect to effects on health insurance coverage, CBO and JCT project that, in FY2018, 14 million more people would be uninsured under the AHCA than under current law and, in FY2026, 24 million more people would be uninsured.
In January 2017, the House and Senate adopted a budget resolution for FY2017 (S.Con.Res. 3), which reflects an agreement between the chambers on the FY2017 budget and sets forth budgetary levels for FY2018-FY2026. S.Con.Res. 3 also includes reconciliation instructions directing specific committees to develop and report legislation that would change laws within their respective jurisdictions to reduce the deficit. These instructions trigger the budget reconciliation process, which may allow certain legislation to be considered under expedited procedures. The reconciliation instructions included in S.Con.Res. 3 direct two committees in each chamber to report legislation within their jurisdictions that would reduce the deficit by $1 billion over the period of FY2017 through FY2026. In the House, the Committee on Ways and Means and the Energy and Commerce Committee are directed to report. In the Senate, the Committee on Finance and the Committee on Health, Education, Labor, and Pensions are directed to report.
On March 6, 2017, the Committee on Ways and Means and the Energy and Commerce Committee independently held markups. Each committee voted to transmit its budget reconciliation legislative recommendations to the House Committee on the Budget.1 Combined, these two bills are referred to as the American Health Care Act (AHCA).
The Energy and Commerce Committee's bill includes a number of changes to the Medicaid program. The bill would repeal some parts of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended), such as the changes the ACA made to presumptive eligibility and the state option to provide Medicaid coverage to individuals with income above 133% of the federal poverty level (FPL). The bill would amend the enhanced matching rates for the ACA Medicaid expansion and the ACA Medicaid disproportionate share hospital (DSH) allotment reductions. In addition, the AHCA includes a number of new Medicaid provisions that are not specific to aspects of the ACA. The most significant new provision would convert Medicaid financing to a per capita cap model (i.e., per enrollee limits on federal payments to states) starting in FY2020.
The Energy and Commerce Committee's bill also would repeal or modify several ACA requirements for private health insurance plans, and it would establish a late-enrollment penalty for certain individuals who do not maintain health insurance coverage. The bill would repeal the ACA's cost-sharing subsidies for lower-income individuals who purchase health insurance through the exchanges, and it would establish a new fund to provide funding for states for specified activities intended to improve access to health insurance and health care in the state. The bill could restrict federal funding for the Planned Parenthood Federation of America (PPFA) and its affiliated clinics for a period of one year, and it would appropriate an additional $422 million for FY2017 to the Community Health Center Fund. The bill also would repeal all funding for the ACA-established Prevention and Public Health Fund (PPHF).
The bill from the Committee on Ways and Means would repeal many of the new taxes and fees established under the ACA, and it would effectively eliminate the ACA's individual and employer mandates. The bill would repeal the ACA's premium tax credit for lower-income individuals who purchase insurance through an exchange, and it would establish a new tax credit for individuals based on age and adjusted by a formula that takes into account income. The bill also includes several provisions that would modify the rules governing health savings accounts (HSAs).
The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) estimate that the AHCA would reduce federal deficits by $337 billion over the period FY2017-FY2026.2 With respect to effects on health insurance coverage, CBO and JCT project that, in FY2018, 14 million more people would be uninsured under the AHCA than under current law and, in FY2026, 24 million more people would be uninsured.
This report contains three tables that, together, provide an overview of the AHCA provisions. Table 1 includes provisions that apply to the private health insurance market, Table 2 includes provisions that affect the Medicaid program, and Table 3 includes provisions related to public health and taxes. Each table contains a column identifying whether the AHCA provision is related to an ACA provision (e.g., whether it repeals an ACA-related provision). A table identifying key CRS policy staff appears at the end of the report.
Sections of the AHCA |
Current Law Summary |
Explanation of AHCA Provision |
Related to the ACA?a |
|
Health Insurance Tax Credit and Cost-Sharing Subsidies |
||||
Section _02 |
Additional Modifications to Premium Tax Credit |
The ACA authorizes premium tax credits to help eligible individuals pay for certain health plans offered through individual exchanges only. Eligible individuals may receive the credit in advance (i.e., during the year). It also specifies the tax credit calculation formula, which includes income as a factor. |
Section _02 would amend the ACA premium tax credits to allow the credits to apply to certain off-exchange plans. It would amend the tax credit calculation formula by specifying income and age as factors. These changes would go into effect beginning tax year 2018. |
Yes |
Section _01 |
Recapture Excess Advance Payments of Premium Tax Credits |
The ACA authorizes premium tax credits to help eligible individuals pay for certain health plans offered through individual exchanges only. Individuals may receive the credit during the year; such payments are later reconciled when individuals file income-tax returns. Individuals who receive excess credits must pay back those amounts; amounts are capped for those with incomes under 400% of FPL. |
Section _01 would disregard the income-related caps applicable to excess credit repayments for 2018 and 2019. In other words, any individual who was overpaid in tax credits would have to repay the entire excess amount during those two years, regardless of income. |
Yes |
Section _03 |
Premium Tax Credit |
The ACA authorizes premium tax credits to help eligible individuals pay for certain health plans offered through individual exchanges only. Eligible individuals may receive the credit in advance (i.e., during the year). |
Section _03 would sunset the ACA premium tax credit beginning tax year 2020. |
Yes |
Section 131 |
Repeal of Cost-Sharing Subsidy |
The ACA authorizes subsidies to reduce cost-sharing expenses for eligible individuals enrolled in certain health insurance exchange plans. |
Section 131 would repeal the cost-sharing subsidies effective for plan years beginning in 2020. |
Yes |
Section _15 |
Refundable Tax Credit for Health Insurance Coverage |
The federal tax code currently allows two credits to help eligible individuals pay for health insurance that meets specified standards: (1) the Health Coverage Tax Credit, with a sunset date of January 1, 2020, and (2) the premium tax credit for eligible individuals enrolled in certain exchange health plans, established by the ACA, with no sunset date. |
Section _03 would sunset the ACA premium tax credit beginning tax year 2020. Section _15 would authorize a new refundable, advanceable tax credit, effective beginning tax year 2020. The credits would be allowed for citizens, nationals, and qualified aliens enrolled in "eligible health insurance" who are not eligible for other sources of coverage. The credit amounts would be based on age and adjusted by a formula that takes into account income. Credits would be capped according to a maximum dollar amount and family size. Credit amounts in excess of premiums would be paid into health savings accounts. |
No |
Section _04 |
Small Business Tax Credit |
The ACA established a small business health insurance tax credit. |
Section _04 would sunset the small business tax credit beginning tax year 2020. |
Yes |
Repeal Mandates |
||||
Section _05 |
Individual Mandate |
The ACA created an individual mandate, a requirement for most individuals to maintain health insurance coverage or pay a penalty for noncompliance. |
Section _05 would effectively eliminate the annual penalty, retroactively beginning CY2016. |
Yes |
Section _06 |
Employer Mandate |
The ACA requires employers to either provide health coverage or face potential employer tax penalties. The penalties are imposed on firms with at least 50 full-time equivalent employees if one or more of their full-time employees obtain a premium tax credit through a health insurance exchange. |
Section _06 would effectively eliminate the employer tax penalties retroactively beginning CY2016. |
Yes |
Continuous Coverage |
||||
Section 133 |
Continuous Health Insurance Coverage Incentive |
The ACA created an individual mandate, a requirement for most individuals to maintain health insurance coverage or pay a penalty for noncompliance. Under the ACA, premiums in the individual and small-group markets may vary only by self-only or family enrollment, geographic rating area, tobacco use (limited to a ratio of 1.5:1), and age (limited to a ratio of 3:1 for adults). Health insurance issuers offering health plans in the individual, small-group, and large-group markets must offer plans on a guaranteed-issue basis. Issuers and sponsors of health plans (e.g., employers) are prohibited from excluding coverage of preexisting conditions. |
Section _05 would effectively repeal the individual mandate, retroactively beginning CY2016. Section 133 would require issuers offering plans in the individual and small-group markets to assess a penalty (or, in essence, vary premiums) on policyholders who (1) had a gap in creditable coverage that exceeded 63 days in the prior 12 months and (2) aged out of their dependent coverage (i.e., young adults up to the age of 26) and did not enroll in coverage during the next open enrollment period. The penalty would be a 30% increase in monthly premiums during the enforcement period, which is either a 12-month period or the remainder of the plan year (if a person enrolls in coverage outside the open enrollment period). The provision would be effective for coverage obtained during special enrollment periods for plan year 2018 and for all coverage beginning plan year 2019. |
Yes |
Other Market Reforms |
||||
Section 135 |
Change in Permissible Age Variation in Health Insurance Premium Rates |
Under the ACA, premiums in the individual and small-group markets may vary only by self-only or family enrollment, geographic rating area, tobacco use (limited to a ratio of 1.5:1), and age (limited to a ratio of 3:1 for adults). The age rating ratio means that a plan may not charge an older individual more than three times the premium that the plan charges a 21-year-old individual. |
Under Section 135, the HHS Secretary may implement an age rating ratio of 5:1 for adults for premiums in the individual and small-group markets for plan years beginning on or after January 1, 2018. That is, a plan would not be able to charge an older individual more than five times the premium that the plan charges a 21-year-old individual. States would have the option to implement a different ratio for adults. |
Yes |
Section 134 |
Increasing Coverage Options |
The ACA requires that nongrandfathered plans offered by health insurance issuers in the individual and small-group markets must (1) cover certain benefits (i.e., the 10 EHBs); (2) comply with specific cost-sharing limitations; and (3) meet a certain generosity level (i.e., actuarial value)—bronze (60% AV), silver (70% AV), gold (80% AV), or platinum (90% AV). |
Under Section 134, plans offered after December 31, 2019, would no longer need to meet a certain generosity level. |
Yes |
Section 132 |
Patient and State Stability Fund |
NA |
Section 132 would establish a Patient and State Stability Fund to provide funding to states for specified activities in the amounts of $15 billion in each of FY2018 and FY2019 and $10 billion in each subsequent year through FY2026. |
No |
Sources: U.S. Congress, House Committee on Energy and Commerce, Budget Reconciliation Legislative Recommendations Relating to Repeal and Replace of the Patient Protection and Affordable Care Act, committee print, 115th Cong., 1st sess., March 6, 2017. U.S. Congress, House Committee on Ways and Means, Budget Reconciliation Legislative Recommendations Relating to Repeal and Replace of Health-Related Tax Policy, committee print, 115th Cong., 1st sess., March 6, 2017.
Notes: ACA = Patient Protection and Affordable Care Act (P.L. 111-148, as amended); AHCA = American Health Care Act; AV = actuarial value; CY = calendar year; EHB = essential health benefits; FPL = federal poverty level; FY = fiscal year; NA = not applicable.
a.
Yes = Proposed provision would repeal or amend (1) provision(s) newly established in the ACA or (2) modifications made by the ACA to previously established provisions.
No = Proposed provision would not repeal or amend any provisions described above.
Section of the AHCA |
Current Law Summary |
Explanation of AHCA Provision |
Related to the ACAa? |
|
ACA Medicaid Expansion |
||||
Section 112 (a)(1) |
ACA Medicaid Expansion |
The ACA established 133% of FPL as the new mandatory minimum Medicaid income-eligibility level for most nonelderly adults beginning January 1, 2014. On June 28, 2012, the U.S. Supreme Court issued its decision in National Federation of Independent Business v. Sebelius, which effectively made the ACA Medicaid expansion optional for states. |
Section 112(a)(1) would make the ACA Medicaid expansion optional for states after December 31, 2019. |
Yes |
Section 112 (b)(1) |
"Newly Eligible" Federal Matching Rate |
Medicaid is jointly financed by the federal government and the states. The federal government's share of a state's expenditures for most Medicaid services is called the FMAP rate. Exceptions to the regular FMAP rate have been made for certain states, situations, populations, providers, and services. The ACA added a few FMAP exceptions, including the newly eligible federal matching rate (i.e., the matching rate for individuals who are newly eligible for Medicaid due to the ACA Medicaid expansion). |
Section 112(b)(1) would maintain the current structure of the newly eligible matching rate for expenditures before January 1, 2020. However, on or after January 1, 2020, the newly eligible matching rate would apply only to expenditures for newly eligible individuals who are enrolled in Medicaid as of December 31, 2019, and do not have a break in eligibility for more than one month after that date. |
Yes |
Section 112(b)(2) |
"Expansion State" Federal Matching Rate |
The ACA added the expansion state federal matching rate, which is the federal matching rate available for nonpregnant, childless adults in expansion states that have implemented the ACA Medicaid expansion who were eligible for Medicaid on March 23, 2010, and are in the eligibility group for the ACA Medicaid expansion. |
Section 112(b)(2) would amend the formula for the expansion state matching rate after CY2017. In addition, after January 1, 2020, the expansion state matching rate would apply only to expenditures for eligible individuals who were enrolled in Medicaid as of December 31, 2019, and do not have a break in eligibility for more than one month after that date. |
Yes |
Section 112(c) |
Sunset of Essential Health Benefits Requirement |
The ACA amends Medicaid ABP coverage by requiring states to include at least the 10 EHBs. The 10 EHBs include (1) ambulatory patient services; (2) emergency services; (3) hospitalization; (4) maternity and newborn care; (5) mental health and substance use disorder services (including behavioral health treatment); (6) prescription drugs; (7) rehabilitative and habilitative services and devices; (8) laboratory services; (9) preventive and wellness services and chronic disease management; and (10) pediatric services, including oral and vision care. |
Section 112(c) would repeal the requirement that ABP coverage include at least the 10 EHBs after December 31, 2019. |
Yes |
Medicaid Financing |
||||
Section 121 |
Per Capita Allotment for Medical Assistance |
The federal government reimburses states for a portion (i.e., the federal share) of each state's Medicaid program costs. Because federal Medicaid funding is an open-ended entitlement to states, there is no upper limit or cap on the amount of federal Medicaid funds a state may receive. |
Section 121 would reform federal Medicaid financing to a per capita cap model (i.e., per enrollee limits on federal payments to states) starting in FY2020. Specifically, each state's spending in FY2016 would be the base to set targeted spending for each enrollee category in FY2019 and subsequent years for that state. Each state's targeted spending amount would increase annually by the percentage increase in the medical care component of the consumer price index for all urban consumers. Starting in FY2020, any state with spending higher than its specified targeted aggregate amount would receive reductions to its Medicaid funding for the following fiscal year. |
No |
Section 113 |
Elimination of Disproportionate Share Hospital Cuts |
The ACA required aggregate reductions in Medicaid DSH allotments for FY2014 through FY2020. Subsequent laws amended these reductions. Under current law, the aggregate reductions to the Medicaid DSH allotments are to impact FY2018 through FY2025. |
Section 113 would eliminate the Medicaid DSH allotment reductions after FY2019. In addition, nonexpansion states would be exempt from the ACA Medicaid DSH allotment reductions. |
Yes |
Section 115 |
Safety Net Funding for Nonexpansion States |
NA |
Section 115 would establish safety net funding for nonexpansion states to adjust payment amounts for Medicaid providers. The fund would provide $2 billion each year starting in CY2018 through CY2021. |
No |
Section 111(2) |
Federal Medicaid Matching Rate for Community First Choice Option |
The ACA established the Community First Choice Option, which allows states to offer community-based attendant services and supports as an optional Medicaid state plan benefit and to receive an FMAP increase of 6 percentage points for doing so. |
Section 111(2) would repeal the increased FMAP rate for the Community First Choice Option on January 1, 2020. |
Yes |
Section 116 (c) |
Increased Administrative Matching Percentage |
The federal government's share of a state's expenditures for most Medicaid services is called the FMAP rate. Exceptions to the regular FMAP rate have been made for certain states, situations, populations, providers, and services. Most administrative activities receive a 50% federal matching rate. |
Section 116(c) would increase the federal match for administrative activities to carry out the increase in Medicaid eligibility redeterminations under Section 116(a) by 5 percentage points. This increased federal match would be available from October 1, 2017, through December 31, 2019. |
No |
Medicaid Eligibility and Enrollment |
||||
Section 112(a)(2) |
State Option for Coverage for Individuals with Income That Exceeds 133% of FPL |
The ACA created an optional Medicaid eligibility category for all nonelderly individuals with income above 133% of FPL up to a maximum level specified in the Medicaid state plan (or waiver). |
Section 112(a)(2) would repeal the state option to extend coverage to adults above 133% of FPL after December 31, 2019. |
Yes |
Section 111(1)(A) and (3) |
Federal Payments to States: Presumptive Eligibility |
The ACA expands the types of entities (i.e., all hospitals) that are permitted to make presumptive-eligibility determinations to enroll certain groups in Medicaid for a limited time until a formal Medicaid eligibility determination is made. The ACA also expands the groups of individuals for whom presumptive-eligibility determinations may apply. |
Section 111(1)(A) would no longer allow hospitals to elect to make presumptive-eligibility determinations. Section 111(3) would terminate the authority for certain states to make presumptive-eligibility determinations for the ACA Medicaid expansion group or the State Option for Coverage for Individuals with Income That Exceeds 133% of FPL. The repeal would be effective January 1, 2020. |
Yes |
Section 111(1)(B) |
Federal Payments to States: Stairstep Children |
The ACA expands the mandatory Medicaid income eligibility level for poverty-related children aged 6 to 19 from 100% of FPL to 133% of FPL. |
Section 111(1)(B) would repeal the ACA requirement, specifying the end date of the ACA requirement as December 31, 2019. |
Yes |
Section 114(a) |
Letting States Disenroll High-Dollar Lottery Winners |
The ACA created a definition of household income based on MAGI to determine income eligibility for various Medicaid eligibility groups. Under Medicaid regulations, states are directed to include certain types of irregular income received as a lump sum (e.g., state income tax refund, lottery or gambling winnings) when determining income eligibility based on MAGI, but only in the month the irregular income is received. |
Section 114(a) would direct states on how to treat irregular income received as a lump sum when determining MAGI income eligibility on or after January 1, 2020. |
Yes |
Section 114(b) |
Repeal of Retroactive Eligibility |
States are required to cover Medicaid benefits retroactively for three months before the month of application for individuals who are subsequently determined eligible, if the individual would have been eligible during that period had he or she applied. |
Section 114(b) would limit the effective date for retroactive coverage of Medicaid benefits to the month in which the applicant applied for Medicaid applications on or after October 1, 2017. |
No |
Section 114(c) |
Ensuring States Are Not Forced to Pay for Individuals Ineligible for the Program |
States are required to obtain documentary evidence of satisfactory immigration status or U.S. citizenship or nationality when enrolling applicants in Medicaid. Applicants must be provided with reasonable opportunity to present such documentation and must be enrolled in Medicaid during that time. Federal financial participation (FFP) is available for Medicaid claims for services during this period. |
Section 114(c) would, with respect to certain individuals, eliminate the state's obligations to provide a reasonable opportunity for submitting immigration status documents and to furnish Medicaid during this period. It would rescind FFP for claims for services during any reasonable opportunity period that the state elects to provide. |
No |
Section 114(d) |
Updating Allowable Home Equity Limits in Medicaid |
There is a limit on the amount of home equity a Medicaid applicant can shield from aggregate asset limits that otherwise would disqualify the applicant from Medicaid eligibility for nursing-facility services or other long-term care. In 2017, the federal minimum home-equity limit is $560,000; a state may elect a higher amount, not to exceed $840,000. |
Section 144(d) would repeal the authority for states to elect a home equity limit amount above the federal minimum, effective after 180 days from enactment. |
No |
Section 116 (a) |
Frequency of Eligibility Determinations |
The ACA requires states to determine income eligibility based on MAGI for most of Medicaid's nonelderly populations. For such individuals, states are required to redetermine Medicaid eligibility once every 12 months, except in the case where the Medicaid agency receives information about a change in a beneficiary's circumstances that may affect eligibility. In this case, the Medicaid agency must redetermine Medicaid eligibility at the appropriate time based on such changes. |
Section 116(a) would increase the frequency of redeterminations from every 12 months to every 6 months for individuals eligible for Medicaid through (1) the ACA Medicaid expansion or (2) the state option for coverage for individuals with income that exceeds 133% of FPL for eligibility determinations beginning October 1, 2017. |
Yes |
Other Medicaid Provision |
||||
Section 116 (b) |
Civil Monetary Penalty |
Under the ACA, the Secretary of Health and Human Services may impose civil monetary penalties and assessments in addition to other penalties on a person, including an organization, agency, or other entity (but excluding a beneficiary), who knowingly presents (or causes to be presented) to a federal or state employee or agent certain false or fraudulent Medicaid claims. For example, penalties may apply to services that were not provided as claimed or when services are provided to individuals who are not eligible for federal health benefits. The Secretary may impose civil monetary penalties of up to $10,000 for each item or service claimed and up to $50,000 under certain additional circumstances, as well as damages. |
This provision would authorize the Secretary to impose in addition to other penalties a civil monetary penalty of up to $20,000 per beneficiary or per submitted claim when the Secretary determined that individuals knowingly submitted Medicaid claims for beneficiaries who were enrolled in Medicaid, even though their income exceeded the financial-eligibility threshold. This provision would apply to claims submitted on behalf of such beneficiaries eligible for Medicaid through the Medicaid expansion and enrolled in Medicaid on or after October 1, 2017. |
Yes |
Source: U.S. Congress, House Committee on Energy and Commerce, Budget Reconciliation Legislative Recommendations Relating to Repeal and Replace of the Patient Protection and Affordable Care Act, committee print, 115th Cong., 1st sess., March 6, 2017.
Notes: ACA = Patient Protection and Affordable Care Act (P.L. 111-148, as amended); AHCA = American Health Care Act; ABP = Alternative Benefit Plan; CHIP = State Children's Health Insurance Program; CY = calendar year; DSH = disproportionate share hospital; EHB = essential health benefits; FMAP = federal medical assistance percentage; FPL = federal poverty level; FY = fiscal year; MAGI = modified adjusted gross income; NA = not applicable.
a.
Yes = Proposed provision would repeal or amend (1) provision(s) newly established in the ACA or (2) modifications made by the ACA to previously established provisions.
No = Proposed provision would not repeal or amend any provisions described above.
Section of the AHCA |
Current Law Summary |
Explanation of AHCA Provision |
Related to the ACA?a |
|
Public Health |
||||
Section 101 |
Prevention and Public Health Fund |
The ACA established the Prevention and Public Health Fund and provided a permanent annual appropriation for prevention and public health programs. Annual appropriation amounts were subsequently reduced. |
Section 101 would repeal all Prevention and Public Health Fund appropriations starting in FY2019 and rescind any unobligated balance remaining at the end of FY2018. |
Yes |
Section 102 |
Community Health Center Program |
The ACA created the Community Health Center Fund and directly appropriated $3.6 billion annually to support the health center program for FY2011-FY2015. The annual appropriation was subsequently extended for FY2016-FY2017. |
Section 102 would provide an additional $422 million to the Community Health Center Fund in FY2017. |
Yes |
Section 103 |
Federal Payments to States |
Planned Parenthood Federation of America-affiliated health centers receive reimbursements, including from Medicaid and other federal programs, for family planning and other services provided to beneficiaries. Planned Parenthood Federation of America and its affiliates may receive federal grants. Some facilities provide abortions using nonfederal revenue sources because federal funds are available for abortions only in cases of rape, incest, or endangerment of a mother's life. |
Section 103 would restrict a prohibited entity, for a period of one year effective at enactment, from receiving direct spending (e.g., Medicaid reimbursements). A prohibited entity is (1) a nonprofit organization; (2) an essential community provider that provides family planning, reproductive health, and any other related services; (3) an organization that provides abortions in instances when the pregnancy is not the result of rape, incest, or likely to endanger the mother's life; and (4) an organization that received federal and state Medicaid reimbursements in FY2014 that exceeded $350 million. The Congressional Budget Office expects that this prohibited entity would be the Planned Parenthood Federation of America. |
No |
Tax Advantaged Accounts |
||||
Section _08 |
Repeal of Tax on Over-the-Counter Medications |
Taxpayers may use several different types of tax-advantaged health accounts to pay or be reimbursed for qualified medical expenses. However, the ACA imposed the requirement that amounts paid for medicine or drugs are qualified expenses only in the case of prescribed drugs and insulin and not in the case of over-the-counter medications. |
Section _08 would repeal the requirement, effective beginning tax year 2018. |
Yes |
Section _09 |
Repeal of Increase of Tax on Health Savings Accounts |
Distributions from Archer MSAs and HSAs that are used for purposes other than paying for qualified medical expenses are taxed at 20%. Prior to the ACA, the tax rate on such distributions was 15% and 10% for Archer MSAs and HSAs, respectively. |
Section _09 would reduce the applicable tax rate to 15% and 10% for Archer MSAs and HSAs, respectively, for distributions made after December 31, 2017. |
Yes |
Section _10 |
Repeal of Limitations on Contributions to Flexible Spending Account |
Under the ACA, an employee may contribute a maximum of $2,500 to a health FSA established under a cafeteria plan. |
Section _10 would repeal this limit, effective beginning tax year 2018. |
Yes |
Section _16 |
Maximum Contribution Limit to Health Savings Account Increased to Amount of Deductible and Out-of-Pocket Limitation |
HSA contributions are subject to an annual limit, which is adjusted for inflation. In 2017, the contribution limit is $3,400 for account holders enrolled in self-only coverage and $6,750 for account holders enrolled in family coverage. |
Section _16 would increase the HSA annual contribution limits to match the out-of-pocket limits for HSA-qualified high-deductible health plans for self-only and family coverage, effective beginning in tax year 2018. |
No |
Section _17 |
Allow Both Spouses to Make Catch-Up Contributions to the Same Health Savings Account |
HSA contributions are subject to limits. In the case of a married couple, if either spouse has HSA-qualified family coverage and both spouses have their own HSAs, then both spouses are treated as if they have only one family plan for purposes of the HSA contribution limit. Their annual contribution limit is first reduced by any amount paid to Archer MSAs of either spouse for the taxable year, and then the remaining contribution amount is divided equally between the spouses unless they agree on a different division. Each spouse is allowed to make catch-up contributions to his or her respective HSA, provided each spouse is eligible to do so. |
Under Section _17, with respect to the contribution limit to an HSA, married individuals would not have to take into account whether their spouse is also covered by an HSA-qualified high-deductible health plan. The section also would effectively allow both spouses to make catch-up contributions to one HSA. The section would apply to taxable years beginning in 2018. |
No |
Section _18 |
Special Rule for Certain Medical Expenses Incurred Before Establishment of Health Savings Account |
In general, withdrawals from HSAs are exempt from federal income taxes if used for qualified medical expenses, except for health insurance. However, withdrawals from HSAs are not exempt from federal income taxes if used to pay qualified medical expenses incurred before the HSA was established. |
Section 225 would provide a circumstance under which HSA withdrawals may be used to pay qualified medical expenses incurred before the HSA was established. Section 225 would apply to coverage beginning after December 31, 2017. |
No |
Tax Provisions |
||||
Section _1 |
Remuneration from Certain Insurers |
Generally, employers may deduct the remuneration paid to employees as "ordinary and necessary" business expenses, subject to any statutory limitations. However, under the ACA, certain health insurance providers cannot deduct the remuneration paid to an officer, director, or employee in excess of $500,000. |
Section _1 would repeal this limit, effective beginning tax year 2018. |
Yes |
Section _1 |
Repeal of Tanning Tax |
The ACA imposes an excise tax on indoor tanning services equal to 10% of the amount paid. |
Section _1 would repeal the tax, effective after December 31, 2017. |
Yes |
Section _1 |
Repeal of Tax on Prescription Medications |
The ACA imposes an annual tax on certain manufacturers or importers of branded prescription drugs. |
Section _1 would repeal the tax, effective CY2018. |
Yes |
Section _2 |
Repeal of Health Insurance Tax |
The ACA imposes an annual fee on certain health insurers. The fee has been suspended for CY2017 but is to apply again beginning in CY2018. |
Section _2 would repeal the fee, effective CY2018. |
Yes |
Section _1 |
Repeal of Net Investment Income Tax |
The ACA applies a 3.8% tax to certain net investment income of individuals, estates, and trusts with income above specified amounts. |
Section _1 would repeal the net investment tax, effective beginning tax year 2018. |
Yes |
Section _07 |
Repeal of the Tax on Employee Health Insurance Premiums and Health Plan Benefits |
The ACA established a 40% excise tax on high-cost employer-sponsored coverage (the so-called Cadillac tax) effective in 2018; however, a subsequent law delayed implementation until 2020. |
Section _07 would delay implementation of the tax until 2025. |
Yes |
Section _11 |
Repeal of Medical Device Excise Tax |
The ACA established a 2.3% excise tax that is imposed on the sale of certain medical devices. The tax took effect on January 1, 2013, but a subsequent law imposed a two-year moratorium for CY2016-CY2017. |
Section _11 would repeal the tax, effective for sales after December 31, 2017. |
Yes |
Section _12 |
Repeal of Elimination of Deduction for Expenses Allocable to Medicare Part D Subsidy |
Employers that provide Medicare-eligible retirees with qualified prescription drug coverage are eligible for federal subsidy payments. Prior to implementation of the ACA, employers were allowed to claim a business deduction for their qualified retiree prescription drug expenses, even though they also received the federal subsidy to cover a portion of those expenses. Under the ACA, beginning in 2013, the amount allowable as a deduction is reduced by the amount of the federal subsidy received. |
Section _12 would repeal the ACA change and reinstate business-expense deductions for retiree prescription drug costs without reduction by the amount of any federal subsidy. The change would be effective for taxable years beginning after December 31, 2017. |
Yes |
Section _13 |
Repeal of Increase in Income Threshold for Determining Medical Care Deduction |
Under the ACA, taxpayers who itemize their deductions may deduct qualifying medical expenses if the expenses exceed 10% of the taxpayer's adjusted gross income. Prior to the ACA, the AGI threshold was 7.5% for all taxpayers. |
Section _13 would reduce the AGI threshold to 7.5% for all taxpayers, effective beginning tax year 2018 for taxpayers under the age of 65 and beginning tax year 2017 for taxpayers aged 65 and older. |
Yes |
Section _14 |
Repeal of Medicare Tax Increase |
Under the ACA, a Medicare Hospital Insurance surtax is imposed at a rate equal to 0.9% of an employee's wages or a self-employed individual's self-employment income. The surtax applies only to taxpayers with taxable income in excess of $250,000 if married filing jointly; $125,000 if married filing separately; and $200,000 for all other taxpayers. |
Section _14 would repeal the 0.9% Medicare surtax, beginning after December 31, 2017. |
Yes |
Sources: U.S. Congress, House Committee on Energy and Commerce, Budget Reconciliation Legislative Recommendations Relating to Repeal and Replace of the Patient Protection and Affordable Care Act, committee print, 115th Cong., 1st sess., March 6, 2017. U.S. Congress, House Committee on Ways and Means, Budget Reconciliation Legislative Recommendations Relating to Repeal and Replace of Health-Related Tax Policy; Relating to Remuneration from Certain Insurers; Relating to Repeal of Tanning Tax; Relating to Repeal of Certain Consumer Taxes; Relating to Repeal of Net Investment Income Tax, committee prints, 115th Cong., 1st sess., March 6, 2017.
Notes: ACA = Patient Protection and Affordable Care Act (P.L. 111-148, as amended); AGI = adjusted gross income; AHCA = American Health Care Act; CY = calendar year; FFP = federal financial participation; FSA = flexible spending account; FY = fiscal year; HSA = health savings account; MSA = medical savings account; NA = not applicable.
a.
Yes = Proposed provision would repeal or amend (1) provision(s) newly established in the ACA or (2) modifications made by the ACA to previously established provisions.
No = Proposed provision does not repeal or amend any provisions described above.
Author Contact Information
Key Policy Staff
Area of Expertise |
Name |
Phone |
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Private Health Insurance |
[author name scrubbed] |
[phone number scrubbed] |
[email address scrubbed] |
Annie Mach |
[phone number scrubbed] |
[email address scrubbed] |
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Namrata Uberoi |
[phone number scrubbed] |
[email address scrubbed] |
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Julie Whittaker |
[phone number scrubbed] |
[email address scrubbed] |
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Medicaid |
Evelyne Baumrucker |
[phone number scrubbed] |
[email address scrubbed] |
[author name scrubbed] |
[phone number scrubbed] |
[email address scrubbed] |
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Kirsten Colello |
[phone number scrubbed] |
[email address scrubbed] |
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[author name scrubbed] |
[phone number scrubbed] |
[email address scrubbed] |
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Public Health |
[author name scrubbed] |
[phone number scrubbed] |
[email address scrubbed] |
Elayne Heisler |
[phone number scrubbed] |
[email address scrubbed] |
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Sarah Lister |
[phone number scrubbed] |
[email address scrubbed] |
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Taxes |
Annie Mach |
[phone number scrubbed] |
[email address scrubbed] |
Budget and Reconciliation Process |
Megan Lynch |
[phone number scrubbed] |
[email address scrubbed] |
1. |
U.S. Congress, House Committee on Energy and Commerce, Budget Reconciliation Legislative Recommendations Relating to Repeal and Replace of the Patient Protection and Affordable Care Act, committee print, 115th Cong., 1st sess., March 6, 2017. U.S. Congress, House Committee on Ways and Means, Budget Reconciliation Legislative Recommendations Relating to Repeal and Replace of Health-Related Tax Policy; Relating to Remuneration from Certain Insurers; Relating to Repeal of Tanning Tax; Relating to Repeal of Certain Consumer Taxes; Relating to Repeal of Net Investment Income Tax, committee prints, 115th Cong., 1st sess., March 6, 2017. |
2. |
Congressional Budget Office (CBO), American Health Care Act—Budget Reconciliation Recommendations of the House Committees on Ways and Means and Energy and Commerce, March 9, 2017, March 13, 2017, at https://www.cbo.gov/sites/default/files/115th-congress-2017-2018/costestimate/americanhealthcareact_0.pdfhttps://www.cbo.gov/sites/default/files/115th-congress-2017-2018/costestimate/americanhealthcareact_0.pdf. |