House Republicans Legislation to Repeal and Replace the ACA

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How does the new aCA Legislation affect you?

On March 6, 2017, the House Ways and Means Committee and the House Energy and Commerce Committee each released budget reconciliation bills.

Update: On March 24, 2017, House Republicans pulled the American Health Care Act (AHCA). It is unclear whether the bill might be rescheduled, and if so, when. You can expect updates in the future, but in the meantime, the failed legislation provides information about potential future Republican health care reform.

These pieces of legislation are part of the House Republican’s AHCA, the legislation designed to repeal and replace the Affordable Care Act (ACA). This article outlines the major changes proposed in the legislation.

CHANGES TO THE ACA

The AHCA proposes to repeal both the individual and employer mandate penalties. It would also eliminate ACA-imposed taxes on over-the-counter medications, medical devices, prescription drugs and health insurance premiums.

CHANGES TO TAX CREDITS

The AHCA would repeal the ACA premium tax credits beginning in 2020 and replace them with a new age-adjusted, fixed-dollar refundable tax credit. The tax credit would be adjusted for inflation and be available only to people who are not eligible for employer- or government-sponsored health insurance.

The AHCA would also repeal the ACA small business tax credit beginning in 2020.

CHANGES TO HEALTH SPENDING ACCOUNTS

The AHCA would lower taxes on health savings account (HSA) distributions on nonqualified medical expenses to pre-ACA rates effective after Dec. 31, 2017, and allow both spouses to make catch-up contributions to one HSA beginning in 2018. The legislation would also repeal the contribution limits on flexible spending accounts (FSAs), effective for taxable years beginning after Dec. 31, 2017.

CHANGES TO HEALTH INSURANCE MARKETS

The AHCA would repeal the cost-sharing subsidy program. It would also establish a continuous health insurance coverage incentive and the Patient and State Stability Fund, which is designed to lower patient costs and stabilize state markets.

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