AHCA Passes House

The American Health Care Act (AHCA) was passed by the U.S. House of Representatives on May 4, 2017. The AHCA will move to the Senate for a vote and possible amendments.

The AHCA needed 216 votes to pass in the House. It passed on a party-line vote, with 217 Republicans and no Democrats voting in favor of the legislation. It needs a simple majority vote in the Senate to pass.

Impact on ACA Provisions

The AHCA would reduce the penalties imposed under the Affordable Care Act’s (ACA) individual and employer mandate provisions to zero beginning in 2016, effectively repealing both mandates.

While individuals would not be required to obtain health insurance, beginning with open enrollment for 2019, the AHCA would allow issuers to add a 30 percent late-enrollment surcharge for applicants that had a lapse in coverage of more than 63 days during the previous 12 months. The surcharge would be discontinued after 12 months.

The AHCA would repeal the ACA’s current subsidies for low-income individuals who purchase coverage through an Exchange. The subsidies would be replaced with portable tax credits in 2020.

The ACA’s rules on essential health benefits and community rating would stay in place, but states could apply for waivers from these provisions.

HSA Enhancements

The AHCA also includes provisions to encourage the use of health savings accounts (HSAs), such as increasing the annual contribution limit.

Pre-Existing Conditions Under the ACA

The ACA currently protects individuals from being denied coverage due to pre-existing conditions. Specifically, it prohibits both exclusions of coverage of specific benefits and complete exclusions from a plan or coverage based on a pre-existing condition.

The AHCA retains these protections. However, it would allow issuers in states that receive waivers of the community rating rules to charge higher premiums for individuals with pre-existing conditions, in some cases. The AHCA would establish a fund to provide assistance to individuals that have higher premiums due to pre-existing conditions under these circumstances.

Illinois Exchange Premiums Rise by Double-Digits for 2017 Plans

Most Illinois residents get health care coverage through their employers or government programs such as Medicare or Medicaid. But this year, more than 300,000 Illinoisans bought insurance on the Obamacare exchange.

In Illinois, rates will increase by an average of 44 percent for the lowest-priced individual bronze plans, 45 percent for the lowest-priced silver plans and 55 percent for the lowest-priced gold plans. Higher-level plans, such as gold plans, typically have higher monthly costs and lower out-of-pocket costs than lower-level plans.

In Illinois, a 27-year-old who buys the second-lowest price silver plan on the exchange will pay an average of $298 a month before tax credits — a 43 percent increase over this year. A family of four in Illinois will pay an average of $1,078 a month for the second-lowest price silver plan before tax credits.

There are also far fewer plans to compare. In Cook County, individual consumers will have 38 plans to choose from, down from 71 plans this year. In Lake County, there are 18 plans, down from 49 this year. McHenry County went from 42 plans to 14, DuPage from 48 to 34 and Kane from 48 to 25.

The federal government, however, says with the help of tax credits, 60 percent of Illinois residents who buy on the exchange will still be able to choose plans costing no more than $100 a month.