House Republicans Reveal Plan to “Repeal and Replace” the Affordable Care ActMarch 2017
On Monday, March 6, 2017, House Republicans introduced their bill to "repeal and replace" the Patient Protection and Affordable Care Act ("ACA"). If passed in its current form, the bill would eliminate a number of the ACA's key provisions, including the individual mandate, the employer mandate, and the premium tax credit. In place of those provisions, Republicans are proposing a new system of tax credits that is meant to encourage individuals to purchase insurance on the open market. For example, the proposal replaces the income-based tax credits with tax credits that increase based on age. These refundable tax credits would range from $2,000 a year (for persons under 30) to $4,000 (for a person 60 or older). The full credit would be available to individuals with annual incomes of $75,000 or less ($150,000 for married couples filing jointly), with reduced credits available to certain individuals earning more. Families (regardless of income) would be limited to a maximum of $14,000 in annual credits.
The bill also includes a "continuous health insurance coverage incentive." The incentive requires health insurance issuers to increase the monthly premium rate of any person who foregoes health insurance for at least 63 continuous days by thirty percent. Unlike the ACA's individual mandate, this penalty is not expected to generate revenue for the federal government. It is unclear from the current version of the bill, which proposes to eliminate a number of taxes that fund the ACA (including the tanning tax, the branded prescription drug tax, and the .9% additional Medicare tax), how the new age-based tax credits will be funded.
Both the Ways and Means Committee and the Energy and Commerce Committee are set to review and begin markups of the bill on March 8, 2017. Currently, the Congressional Budget Office (CBO) has not provided a formal analysis of the bill's budget impact.
To download a copy of the 123-page bill, click under "Resources" below.