House GOP Revives Health Care Reconciliation Bill; Amendment Offered Providing States Flexibility

By Chatrane Birbal May 2, 2017
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In addition to tending to funding the government, speculation that the House chamber would resume consideration of the GOP health care proposal, the American Health Care Act (AHCA), has grown in recent days.

As previously reported, the AHCA was scheduled for a House floor vote on March 24. However, after negotiations to garner the support of conservative and some moderate GOP lawmakers did not result in a final deal, the vote was canceled. Once Congress clears action of a long-term funding bill this week, there is growing consensus that the House GOP and President Donald Trump may reconsider the AHCA bill.

On April 25, Representatives Mark Meadows (R-NC) and Tom MacArthur (R-NJ), representing the more conservative and more moderate GOP members of the House chamber, released a draft amendment to the AHCA to garner additional support for the bill.

Specifically, the amendment would give states the flexibility to apply for three types of waivers for individual market plans and group plans offered by small employers. These waivers would allow:

  • States to opt to increase age rating ratio—State could increase the age rating ratio above the 5 to 1 ratio as proposed in the AHCA. The Affordable Care Act (ACA) established a 3 to 1 premium ratio based on age to prevent older Americans from being charged more than three times the premium charged to younger consumers for the same coverage. This provision would be applicable for plan years beginning on or after January 1, 2018.

  • States to opt out of the essential health benefits requirements—States would be permitted to opt out of mandating insurers to cover 10 essential health benefits in health care plans. Since the ACA's prohibitions of lifetime and annual limits and cap on out-of-pocket expenditures also only apply to essential health benefits, states granted a waiver would be able to define these protections as well.  This provision would be applicable for plan years beginning on or after January 1, 2020.

  • States to opt to permit insurers to engage in health status underwriting—States would have the option to allow insurance companies operating in their individual insurance market to charge higher premiums for a person with a health condition who does not maintain continuous coverage of at least 63 days, in lieu of the 30 percent of the premium penalty provided by the AHCA. This premium increase would only be for 12 months and would not be permanent. To obtain this specific waiver, the state must operate a program under the AHCA's patient and state stability fund, including the establishment of its own high-risk pool or else participate in a federal high-risk pool that reinsures high-cost health care cases. These changes would apply to plan years beginning in January 1, 2019 (or, for special enrollment periods, beginning with plan year 2018). 

The requirement that insurance carriers offer coverage to individuals with pre-existing conditions would remain the law. In addition, other existing ACA insurance standards like providing coverage for adult children up to age 26, guaranteed renewability, no discrimination based on gender and community rating requirements (except as permitted by waiver) would remain the law.

As we go to press with this week's HR Issues Update, it is unclear whether this amendment will garner enough votes to pass the House. Speaker of the House Paul Ryan (R-WI) will not bring the proposal to the floor without the necessary votes needed for passage. In addition, the House is currently scheduled to be in recess next week, and the fate of this amendment in the Senate chamber is bleak since it does not include taxes or revenue and could thus be deemed nongermane to the rules under which the AHCA is being considered. The AHCA was proposed under the budget reconciliation process and requirements and is limited in its scope to amend only the tax provisions of the ACA.

As Congress considers ACA reforms, SHRM will continue to advocate in support of the employer-sponsored system. Stay tuned to future editions of HR Issues Update for timely and relevant updates.

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