Affordable Care Act Repeal & Replace Proposals Introduced in Congress

Two bills proposed by House Republicans were released on March 6 and committee hearings for mark-ups of the legislation are scheduled for today.

The major proposed changes to the ACA include:

• REPEALING the requirement that all people have health insurance (individual mandate) and that large employers (100+ employees) provide affordable health insurance coverage (employer mandate).
• REPEALING tax credits to individuals to pay deductibles and co-pays beginning in 2020.
• KEEPING the prohibition on annual and life-time benefit payment limits; essential health benefits (including maternity care and preventive services); guaranteed issue and coverage for pre-existing conditions; and coverage for dependent children until age 26.
• CONTINUING the Medicaid expansion until 2020. States (such as New Jersey) that expanded Medicaid eligibility to adults with income up to 138 percent of the federal poverty level will receive federal funding at current ACA levels for people enrolled as of the end of 2019. After that date, federal funding is reduced for new enrollees or those who leave the program and come back in. Per capita payment limits would start in 2020, using each state’s FY 2016 spending as the base-year, with future spending amounts tied to increases in the medical care component of the Consumer Price Index.
• CHANGING premium subsidies for 2018 and 2019 by adjusting for both age and income. Starting in 2020, flat tax credits are established ranging from $2,000 for individuals under 30 to $4,000 for those over 60, with full credit available for those earning less than $75,000 and households earning less than $150,000 (married couples filing jointly).
• INCREASING the amounts individuals and families can contribute to a tax-free health savings account (HSA) to approximately $6,550 and $13,100, respectively, to equal the maximum annual deductible and out-of-pocket expenses under a high deductible health plan.
• REPEALING the small business tax credit, taxes on over the counter medications and medical devices, and various other taxes established under the ACA.
• MAINTAINS the Cadillac Tax (40 percent excise tax on high cost employer-sponsored health plans) but delays the effective date from 2020 until 2025.

A proposal to cap or eliminate the tax exclusion for employment-based health insurance is NOT INCLUDED in either House bill.

This is the beginning of the legislative process, and the proposed bills are likely to see considerable changes going forward. NJBIA will closely monitor these proposals and will provide detailed updates as additional information becomes available.

• Read the House Committee on Energy and Commerce proposal here.
• Read the House Ways and Means Committee description of their proposal here.

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