The AHCA Has Passed the House. What Happens Now?

Senate Version Likely to be Substantially Different

The AHCA passed the House in early May, but it's likely to undergo significant change in the Senate.
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On May 4, 2017, the House of Representatives passed the American Health Care Act (AHCA) and sent it to the Senate. As soon as the measure passed, House Republicans joined President Trump, Vice President Pence, and HHS Secretary Tom Price in a celebration at the White House. But the AHCA still has a very uncertain future.

The House vote came after several weeks of concessions and amendments designed to win support from the Republican representatives who opposed the AHCA in March.

Just 6 weeks before the bill ultimately passed in the House, Republican leadership had pulled it before a scheduled vote in March, when it was clear that there wasn't enough support to pass it.

Democrats are universally opposed to the legislation, and although Republicans have a majority in the House, if more than 22 Republican representatives opposed the bill, it would not have passed. In March, there were at least 33 Republicans opposed to the ACHA. But when the vote came in early May, only 20 Republicans voted against the bill, and it passed with one vote to spare (217-213; it needed 216 to pass).

It's unclear whether the Senate will pass an ACA repeal measure, and if they do, whether the two chambers will be able to agree on a compromise that retains at least some parts of the AHCA.

The Impact of the Current Bill

The AHCA was officially introduced in the House on March 20, and passed less than 7 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 provide $15 billion in federal funds to help cover the cost of large claims in the individual health insurance market.
  • The MacArthur Amendment, which allows states to opt out of some of the ACA's consumer protections. States could choose to allow insurers to raise the premium age rating ratio above the 5:1 cap imposed by the AHCA, 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 provides $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 experience in states that choose to allow insurers to base premiums on medical history when applicants have 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's still an alarming trajectory in terms of the uninsured rate.

    The updated CBO score projects that federal deficits will be 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 in the Senate: Will it Pass the Byrd Test?

    Republicans have a majority in the Senate as well, but their margin is much slimmer in that chamber. There are 52 Republicans in the Senate, along with 46 Democrats and two Independents, both of whom caucus with the Democrats. Since the AHCA is a reconciliation bill, it can pass with a simple majority in the Senate, rather than needing 60 votes.

    But that means that if more than two Republican Senators reject the measure, it won't pass (Vice President Pence can cast the tie-breaker vote if the final count is 50-50). It also means that Democrats cannot control the outcome of the bill; every Democrat in the Senate can vote no, along with one or two Republicans, and it would still pass.

    The fact that the AHCA is a reconciliation bill means that it has very specific rules to which it must adhere. Reconciliation bills can only address issues that directly impact federal spending. The Byrd Rule prevents the Senate from considering "extraneous matter" (ie, things that don't directly impact federal spending) as part of a reconciliation bill.

    There has been considerable debate over whether the MacArthur Amendment would pass the Byrd Rule test; it may end up being jettisoned by the Senate simply because it doesn't meet the test of what can be included in a reconciliation bill. In other words, the Senate parliamentarian, Elizabeth MacDonough, might say that the language in the MacArthur Amendment would require 60 votes to pass, rather than 51; it would therefore have to be removed from the bill, as Senate Republicans will not be able to get 60 votes to dismantle the ACA.

    In order to use the reconciliation process, the Senate will also need a score from the CBO on the version they propose; voting without a score, as the House did, is not an option for a reconciliation bill, since the impact on the federal budget must be a known quantity.

    Senate Is Writing Their Own Bill. How Much of the House Version Will They Retain?

    The same day the AHCA passed the House, news outlets began reporting that the Senate was planning to write their own bill instead of amending the House version. Soon thereafter, Senate Republicans announced a 13-member working group that would be crafting the Senate's bill, and clarified that the legislation would likely be written in private, rather than going through public hearings and committee markups.

    But how much of the House version will the Senate retain? And will the House agree to differences that ultimately exist between the House and Senate bills?

    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.

    Because the language of the MacArthur Amendment may not comply with the Byrd Rule, the weakening of protections for people with pre-existing conditions might not make it into the Senate version of the legislation. Senator Susan Collins (R, Maine) has said publicly that she will not support the House version of the AHCA, or any other bill that result in 23 million more uninsured people, or 850 percent premium increases for low-income elderly people (the CBO report on the House version of the AHCA indicates that for a 64-year-old earning $26,500/year, after-subsidy premiums would increase from $1,700/year under the ACA to $16,100/year under the AHCA in states that keep ACA consumer protections, and $13,600 in states that waive ACA consumer protections; either way, it's an unsustainable increase).

    But there's a larger issue at stake—one that didn't really receive as much attention as it warranted while the AHCA was in the House. The AHCA would slash federal Medicaid spending by $834 billion over the next decade, according to the revised CBO analysis.

    The savings come from two different angles: Curtailing the ACA's Medicaid expansion (none of the 19 states that haven't expanded Medicaid could opt to do so, and states that have expanded coverage would not be 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 end up with states having less federal Medicaid funding over the long term.

    The Medicaid issue is likely to be more of a stumbling block in the Senate. There are several Republican senators—including some from states that have expanded Medicaid—who have expressed concerns about the AHCA's cuts to federal Medicaid funding and the impact that would have on their constituents who rely on Medicaid, including both Medicaid expansion and traditional Medicaid.

    What Happens If the Senate Passes Its Own Version?

    Because Senate Republicans must rally nearly all of their members—losing no more than two—in order to pass their version of the AHCA, passage is by no means a certainty. But what happens next if the bill the Senate is crafting garners at least 51 votes (including a possible tie-breaker vote by the Vice President)?

    Because the Senate is writing their own legislation, and because of concerns that the MacArthur Amendment might not comply with the Byrd Rule, and because several Republican Senators have expressed worry about the House bill's impact on Medicaid, it's a virtual certainty that the House and Senate bills will have considerable differences.

    If that happens, a conference committee will be formed, consisting of members from both the House and the Senate. Their job will be to reconcile differences between the two bills and create a conference report. From there, both the House and Senate have to pass the conference report, which can be debated by lawmakers but not amended.

    If both the House and Senate pass the conference report, it's sent to the president for a signature. President Trump is likely to sign any bill presented to him that repeals or changes at least some portions of the ACA. It's uncertain, however, whether both chambers of Congress will be able to agree on a measure to send to the president.

    It's possible that lawmakers' overriding desire to repeal at least some of the ACA—a campaign promise for many of them—will result in them voting for a bill that they don't fully support.

    On the other hand, the House Freedom Caucus withheld their support for the AHCA in March, and didn't agree to vote for the bill until the MacArthur Amendment was added, allowing states to relax the rules pertaining to essential health benefits and coverage of pre-existing conditions. Would the Freedom Caucus be willing to agree to a potential conference report that strips out that flexibility? Perhaps, but we can't say for certain.

    A Word From Verywell

    Although House leadership and the Trump Administration celebrated the passage of the AHCA in the House, the legislation still has a long way to go. If the Senate passes its own version, it's likely to be considerably different from the House version, and there's no guarantee that both chambers will agree to the compromises that will be necessary to reconcile the two bills.

    For the time being, the ACA remains the law of the land. Health insurance in the individual market is still guaranteed-issue in every state, regardless of medical history (qualifying events are necessary in order to enroll outside of open enrollment). Premium subsidies, based on income and the cost of coverage in each area, are still available in each state's exchange, and Medicaid expansion is unchanged in the 31 states and DC where it has been expanded. The ACA's requirement to maintain coverage or face a tax penalty is also still in effect, and will be until legislation is enacted to repeal it.

    Sources:

    Congress.gov. H.R.1628, American Health Care Act of 2017. Introduced March 20, 2017.

    Congressional Budget Office, American Health Care Act. March 13, 2017.

    Congressional Budget Office, American Health Care Act, March 23, 2017.

    Congressional Budget Office, H.R.1628, American Health Care Act, May 24, 2017.

    Hall M; and Bagley N, Making Sense of "Invisible Risk Sharing" Health Affairs, April 12, 2017.

    U.S. House of Representatives, Committee on Rules, Summary of the Byrd Rule.

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