The Short Life & Sudden Death of the American Health Care Act
Category: ACA and Policy, Cost of Healthcare, Government Programs, Health Insurance

The Short Life and Sudden Death of the American Health Care Act

That was quick.

Less than one month ago, I was handed the text of two documents, one on its way to the House Ways and Means Committee, and the other bound for the House Energy and Commerce Committee in Washington, D.C. Combined, those documents became the American Health Care Act (AHCA) HR 1628.

The act flew through four committees controlled by the Republican majority that wrote it. Then, on Friday, March 24, it landed on the floor of Congress. As written, it made major and decisive changes to the original Affordable Care Act.

They Didn’t Have the Votes
With the current makeup of the U.S. House of Representatives, you need 217 votes to pass legislation. Since there are 237 Republicans, you would think that passing any changes to the Affordable Care Act would be pretty simple. They’ve been fussing for years about how bad it is and have voted to repeal it on many occasions. You’d think we all knew what was coming. You’d think.

Turns out you’d be wrong. That 236 member caucus was pretty fractured when it came to changing the ACA. Here’s a picture of how the Republican House members broke down ideologically over HR 1628, the AHCA.

Graphic of breakdown of Republican Party in the House of Representatives

Notice that although most of the members are in the “moderate middle,” they don’t have enough members in that category to pass an act that requires 217 votes to move out of the House to the Senate. This means that without significant support from either the “Almost Dems” or the “Freedom Caucus” (or, less likely, the Democrats who have their own factions to deal with), the Republicans can’t really get anything done. These differences essentially killed the AHCA.

So, a quick review, what was in the AHCA?

For Business
Business interests looked very favorably on the AHCA because it would have eliminated the fines associated with the Employer Mandate for coverage. I believe this would have been the first step in a domino-fall of other rules and regulations imposed on our business clients over the past five years that changed how businesses counted full-time employees. Rules like 30 hours per week = full time, 1095 reporting and the bizarre fascination with “50 full-time employees or equivalents of labor” that actually keep small businesses from growing. The AHCA also explicitly would have eliminated 10 different taxes and fees added in 2010 by the ACA that affect both businesses and individuals.

For Individuals
The AHCA was a mixed bag for the Individual Market for health insurance. It would have immediately eliminated the taxes in the Individual Mandate to have coverage, which in the past was considered an important nudge to keep risk pools stable and rates under control. As lobbying efforts have now produced (at last count) 29 exemptions to this mandate people can claim, the current impact of the tax is unknown, although there are plenty of guesses out there.

It also would have radically changed the subsidy structure for starting in 2020 to a scheme that would favor younger purchasers and be pretty hard on older, lower-income folks. And it would have imposed a 5:1 age rating on the marketplace, which I’ve discussed at length.

For Medicaid
Medicaid administrators around the nation who had already expanded their programs under the ACA (like Louisiana did) were uniformly unhappy with the proposed AHCA changes. It changed Medicaid from an open-ended payment structure to a fixed payment structure through block grants or per capita payments. The whole scheme was very technical, but suffice it to say, the AHCA “saved” more than $800 billion in federal taxes over 10 years. So we have to assume that’s money the expansion states would never receive. No wonder they weren’t happy!

It also froze the existing expansion (Louisiana’s is now over 410,000 people) on Jan. 1, 2020, and closed that block for good. If people left, they couldn’t get back in.

These changes had the potential to scare Congressman all along the spectrum, from Almost Dems to the Freedom Caucus, and they all found something not to like about it.

Sound Off
Long story short, when the voting was supposed to begin on Friday, March 24, the Freedom Caucus folks were unwilling to support the measure because it didn’t go far enough to “repeal Obamacare.” Here are what some members were saying:

Photo of Ted Yoho, R-Minn. “I won’t vote for anything less than a full repeal. Forget it!”
– Ted Yoho, R-Minn.

“The AHCA is just more giveaways and bailouts to insurance companies!”
– Mark Meadows, R-NC

“This is just Obamacare 2.0.”
– Justin Amash, R-MI

You can see they wanted a lot more of the ACA taken down, and they stuck together and kept their 36 votes out to try and get more. Spoiler: They didn’t get it.

On the other hand, the more provisions from the original ACA that the President and Speaker of the House tried to take out of the act, the more they alienated the OTHER side of the spectrum – the Almost Dems. By the time they started to get the

Freedom Caucus happy, Almost Dems starting bailing out:

“This bill will lead to the loss of coverage and make insurance unaffordable for too many Americans.”
– Charlie Dent, R-Penn.

“I won’t vote for a bill that lets more poor kids fall through the cracks.”
– Jamie Beutler, R-Wash.

“This bill is worse than what we already have!”
– Frank Lobiondo, R-NJ


In the end, the Moderate Middle couldn’t make either side happy enough to vote for the act, and HR 1628, the Republicans’ first crack at changing the healthcare law, was pulled and never voted on.

But I don’t want you to think there’s nothing going on in healthcare in D.C. There are regulatory changes and other bills floating around that may gain traction in the next few weeks. As they become more likely, we’ll definitely go over them here and try to keep all the complex negotiations down to just Straight Talk.

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