On May 4, 2017, the House of Representatives narrowly passed a bill that will repeal and replace the 2010 Patient Protection and Affordable Care Act (ACA). The Republican-backed American Health Care Act (AHCA) passed in the House with a final vote of 217 to 213. President Trump, the Trump Administration, and House Speaker Paul Ryan consider this a major win. However, the AHCA may face significant opposition in the Senate, so it is uncertain whether the AHCA in its current form will become law.

A previous version of the AHCA was introduced in the House earlier this year but was ultimately withdrawn before its scheduled vote due to insufficient support. The bill found momentum again after it received last-minute support from the House Freedom Caucus and key Republican leaders.

Like its initial version, the AHCA will roll back major aspects of the ACA, including Medicaid expansion and the individual mandate. Two recent amendments to the bill, however, helped it gain enough political strength to pass in the House:

  • The MacArthur Amendment: Under this amendment, states can waive aspects of the ACA’s community-rating rules and permit insurers on the exchanges to charge more for patients with pre-existing conditions. Although insurers cannot deny these individuals coverage, there is no limit to the increased charges for pre-existing conditions. Additionally, the MacArthur Amendment allows states to determine the essential health benefits for exchange plans and allows insurers to vary premiums based on age.
  • The Upton Amendment: Included as a reaction to the aforementioned MacArthur Amendment, the Upton Amendment adds an extra $8 billion to the AHCA’s Patient and State Stability Fund over five years to subsidize care to those individuals with pre-existing conditions.

The House approved the revamped bill before the nonpartisan Congressional Budget Office (CBO) could issue a report detailing its impact, but the CBO’s analysis of the initial bill estimated that the AHCA would leave approximately 24 million fewer people insured by 2026.

The AHCA now heads to the Senate, where it faces uncertainty given the narrower Republican majority. Several Senate Republicans have criticized the House bill and, almost immediately after the bill passed in the House, key Senate Republicans have stated that they will draft their own healthcare legislation as an alternative.

The basics of the AHCA, now passed by the House, can be found in this March 2017 client alert. The AHCA will still allow individuals to remain on their parents’ health plans until age 26.