The American Health Care Act: A Blueprint for GOP Health Reform

The Bill Passed in the House in 2017, but Died in the Senate

The AHCA passed the House in early May, but it's likely to undergo significant change in the Senate.
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The American Health Care Act (AHCA) was a 2017 bill that would have repealed and/or replaced a significant portion of the Affordable Care Act. It would not have been a full repeal, however, as the AHCA was a reconciliation bill, and those can only address issues that directly impact federal spending.

The House of Representatives passed the bill in May 2017 by a vote of 217-213 (it needed 216 to pass; House Democrats universally opposed it, but only 20 House Republicans voted against it). Shortly thereafter, House Republicans joined President Trump, Vice President Pence, and then-Secretary of HHS Tom Price in a celebration at the White House. But the AHCA ultimately died in the Senate and the ACA was not repealed.

At the end of 2017, the Tax Cuts and Jobs Act was enacted, which included a repeal of the ACA's individual mandate penalty as of 2019. And some of the ACA's taxes, including the Cadillac Tax, have also been repealed. But otherwise, the Affordable Care Act is still intact as of 2020—although it's facing a lawsuit that's expected to eventually reach the Supreme Court. For the time being, however, the ACA is no longer facing the threat of Congressional repeal, as Democrats regained control of the House as of 2019.

But the AHCA was a significant piece of legislation, and it was successful with House Republicans. It provides a good overview of the sort of health care reform proposals that tend to garner Republican support, and although was never enacted, it's useful in terms of understanding how the GOP views health care reform.

What the AHCA Would Have Done

The AHCA was officially introduced in the House on March 20, and passed less than seven weeks later. During that time it underwent several significant changes via amendments. One of the more controversial aspects of the House vote was that it came before the nonpartisan Congressional Budget Office (CBO) had time to evaluate the revised bill and project its impact.

The CBO did score the bill in mid-March, and again several days later after lawmakers added a manager's amendment to the legislation. The projection in both cases was that the AHCA would result in 24 million additional uninsured people in the U.S. by 2024. But the amended bill was projected to reduce federal deficits by only $150 billion over the coming decade, as opposed to the $337 billion reduction projected for the initial version of the AHCA.

After the second CBO score, House Republicans added three significant amendments to the AHCA:

  • An amendment to create an "invisible risk-sharing program" that would have provided $15 billion in federal funds to help cover the cost of large claims in the individual health insurance market.
  • The MacArthur Amendment, which would have allowed states to opt out of some of the ACA's consumer protections. Under the terms of the amendment, states could have chosen to allow insurers to raise the premium age rating ratio above the 5:1 cap imposed by the AHCA (it's a 3:1 cap under the ACA), redefine the ACA's essential health benefits, and use medical history to determine premiums for applicants who had experienced a gap in coverage in the previous year.
  • The Upton Amendment, introduced the day before the House voted to pass the AHCA, was intended to assuage moderate Republicans' concerns about the impact of the MacArthur Amendment. The Upton Amendment would have provided $8 billion in federal funding (for 2018 through 2023) to be used to offset some of the higher premiums that people with pre-existing conditions could have experienced in states that chose to allow insurers to base premiums on medical history when applicants had a gap in coverage.

The MacArthur Amendment won over the conservative House Freedom Caucus, and the Upton Amendment secured enough support from moderate Republicans that the bill was able to squeak to a victory in the House.

But when lawmakers in the House passed the bill, they didn't yet know what impact their bill would have on the uninsured rate, or on federal spending. They had voted on the bill just hours after introducing the final amendment, and it took the CBO nearly three weeks to complete their scoring on the updated bill.

Updated Score: 23 Million Fewer Insureds; $119 Billion in Deficit Reductions

On May 24, the CBO published an updated analysis of the AHCA, accounting for the three new amendments. They concluded that the amended version of the AHCA (which had passed the House nearly three weeks earlier) would result in 51 million uninsured people by 2026, up from 28 million under the ACA. That increase of 23 million uninsured was smaller than the previous increase of 24 million additional uninsured residents, but it would still have been an alarming trajectory in terms of the uninsured rate.

The updated CBO score projected that federal deficits would have been lowered by $119 billion under the AHCA (smaller savings than the previously projected $337 billion and $150 billion the CBO had estimated in March).

The AHCA would have slashed federal Medicaid spending by $834 billion over the next decade, according to the revised CBO analysis. The savings would have come from two different angles:

  • Curtailing the ACA's Medicaid expansion (none of the 19 states that hadn't expanded Medicaid as of 2017 would have been able to do so, and states that had expanded coverage would not have been able to enroll new beneficiaries at the expansion-level of federal funding after the end of 2019), and
  • Switching overall federal Medicaid funding from the current open-ended matching system to either block grants or per-capita allotments. Either option would have ended up with states having less federal Medicaid funding over the long term.

The Senate Versions of the AHCA

After the AHCA passed in the House, Senate Republicans began writing their own version of the bill. They eventually introduced three separate bills during the summer of 2017, but they all failed to pass:

  • The Better Care Reconciliation Act
  • The Obamacare Repeal Reconciliation Act of 2017
  • The Health Care Freedom Act, aka "Skinny Repeal"

The "Skinny Repeal" bill was the third and final attempt to pass a version of the AHCA in the Senate. This was the bill that Sen. John McCain (R, Arizona) famously gave a thumbs down, joining with fellow Republicans Susan Collins (Maine) and Lisa Murkowski (Alaska)—along with all of the Democrats and Independents in the Senate—to defeat the ACA repeal effort.

In the weeks after, the MacArthur Amendment was added in the House to win over ultra-conservative Republicans in that chamber. There was intense debate over the issue of protecting people with pre-existing conditions. This even became a talking point for Jimmy Kimmel, who used the story of his newborn son's heart surgery to illustrate the importance of covering pre-existing conditions without exception.

The emphasis on protecting people with pre-existing conditions continues to be a primary reason advocates give for preserving and strengthening the ACA. And the potential problems that people with pre-existing conditions would have faced under the AHCA was a big part of why the legislation didn't pass in the Senate.

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Article Sources
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  12. To repeal and replace the ACA by enacting the Obamacare Repeal Reconciliation Act of 2017. Official Title: To provide for reconciliation pursuant to title II of the concurrent resolution on the budget for fiscal year 2017.

    Amendment 271 to H.R.1628: to repeal and replace the ACA by enacting the Obamacare Repeal Reconciliation Act of 2017. Rejected by Senate on July 27, 2017, 45-55.

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    Amendment 667 to H.R.1628: To provide for reconciliation pursuant to title II of the concurrent resolution on the budget for fiscal year 2017. Rejected by Senate on July 27, 2017, 49-51.

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