Publications

Comparing Key Provisions: Affordable Care Act, American Health Care Act, and the Graham-Cassidy Proposal

Two white children's hands, one holding an orange and one holding an apple, indicating the comparison between the Graham-Cassidy proposal and other acts.In July 2017, the United States Senate rejected a series of proposals to repeal and replace the Affordable Care Act (ACA). On September 13, 2017, Senators Lindsey Graham and Bill Cassidy introduced a new proposal to repeal and replace the ACA.

The Graham-Cassidy proposal retains some similarities to the American Health Care Act, which passed the U.S. House of Representatives in May 2017, but includes some notable differences. This brief compares key provisions of the Affordable Care Act, American Health Care Act, and the Graham-Cassidy proposal.

The Senate has until September 30, 2017 to pass a repeal and replace package under the Fiscal Year 2017 budget reconciliation process, which requires a simple majority for passage. After the end of FY 2017, any repeal and replace legislation would most likely require 60 votes for passage. It is possible that budget reconciliation, requiring a simple majority for passage, could be used for repeal and replace legislation in FY 2018 if it is not used for other issues.

On Sept. 25, the U.S. Congressional Budget Office (CBO) issued a preliminary report on a version of the Graham-Cassidy proposal summarized in this brief. The CBO concluded that the bill would save at least $133 billion. However, it would result in millions of people losing health insurance. Additional, detailed analyses may be forthcoming.

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Comparing Key Provisions: Affordable Care Act, American Health Care Act, and Better Care Reconciliation Act

An image of the Capitol building, where the Better Care Reconciliation Act has been proposed.Editor’s Note: CHRT revised the following table (originally published June 27, 2017) to reflect both the U.S. Senate’s July 13 revision of its Better Care Reconciliation Act (BCRA) and the Congressional Budget Office’s score of the revised BCRA.  

On June 22, 2017, Senate Republicans released a discussion draft of the Better Care Reconciliation Act, their proposal to repeal and replace the Affordable Care Act (ACA). The Senate draft retains a similar overall structure as the American Health Care Act, which passed the U.S. House of Representatives in May 2017, but includes some notable differences. The following table compares key provisions of the ACA, American Health Care Act, and Better Care Reconciliation Act. It compares them across several categories: Ensuring Continuous Coverage, Tax Credits for Individual Market Coverage, Cost-Sharing Reductions, Medicaid Expansion, Medicaid Funding Structure, Health Savings Accounts, Private Insurance Market Regulations, Market Stability and Risk Pool, Taxes and Fees, Impacts on Coverage and Premiums, and Impacts on Federal Budget.

For example, for the category of Ensuring Continuous Coverage, the ACA requires an individual with a lapse in coverage to pay an individual mandate penalty of $695 or 2.5% of income above $10,000. The American Health Care Act repeals the ACA’s individual mandate penalty and instead requires individuals with a lapse in coverage to pay 30% higher premiums for one year upon re-enrolling in individual coverage. The Better Care Reconciliation Act also repeals the ACA’s individual mandate penalty, and subjects individuals with a lapse in coverage to a six-month waiting period before re-enrolling.

This document reflects the revised Better Care Reconciliation Act as of July 13, 2017. CHRT will update this table if the Senate votes to approve the motion to proceed.

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American Health Care Act: Key Provisions and Implications, June 2017 Update

A paper with some black text. A green highlighter is highlighting the word "Legislation", referring to the American Health Care Act.In March 2017, House Republicans unveiled the American Health Care Act (AHCA), their proposal to replace the Affordable Care Act (ACA). On May 4, the U.S. House of Representatives passed AHCA by a vote of 217-213. On May 24, the U.S. Congressional Budget Office projected that under the House-passed version of AHCA, 14 million more Americans would be uninsured in 2018 than under current law, with the number of additional uninsured rising to 23 million by 2026. In addition, CBO estimated that average individual market premiums would increase by 20% in 2018 compared to under current law, while average premiums after 2020 could decrease depending on states’ decisions to apply for several waivers proposed in AHCA.

The following table summarizes key AHCA provisions. It lists the provision, the details of the American Health Care Act, and who is primarily affected. The provisions reviewed are:

  • Replace the ACA’s individual mandate with a continuous coverage requirements
  • Change Tax Credits from those based on income and premium cost in the ACA to based on age and allow tax credits to be used on or off Exchange
  • Repeal Cost-Sharing Reduction Subsidies
  • Widen Age Rating Bands
  • Freeze Medicaid Expansion
  • Shift Medicaid f rom funding based on the cost of coverage to Per-Capita limit or block grant
  • State Waivers
  • Patient and State Stability Fund

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American Health Care Act: Key Provisions and Implications in Michigan

The words "Affordable Care Act (ACA)" in black on white paper under a magnifying glass.In March 2017, House Republicans unveiled the American Health Care Act (AHCA), their proposal to replace the Affordable Care Act (ACA). On March 13, the U.S. Congressional Budget Office projected that under the AHCA, 14 million Americans would lose their health insurance in 2018, with the number of uninsured rising to 24 million by 2026. The following summarizes key American Health Care Act provisions and who in Michigan is primarily affected.

For instance, the first proposal summarized is a proposal to replace the ACA’s individual
mandate with a continuous coverage requirement. This proposal would mean that enrollees who experience a lapse in coverage longer than 63 days would pay 30% higher premiums for one year upon re-enrolling in individual coverage.

The  Michigan residents who would be most impacted by this ACHA proposal are individual market enrollees and those that experience spells of uninsurance. There were an estimated 533,000 enrollees in Michigan’s individual market in 2016. There is considerable churning of coverage within the individual market. Our latest survey shows that 5% of those with individual market coverage had spells of uninsurance within the past year.

In addition to these individuals, about 519,000 people in Michigan were uninsured in 2015 but had household incomes that could have qualified them for ACA tax credits. In 2017, the average annual premium for the second lowest cost silver plan in Michigan was $2,736 (before tax credits). A 30% continuous coverage surcharge would increase that annual premium to $3,557.

For more details, see CHRT’s companion piece on the impact of the American Health Care Act in Michigan. 

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American Health Care Act: Michigan Impacts

A desk with glasses, papers, and a calculator. The hands of two people are visible, holding pens.According to the Congressional Budget Office (CBO), the American Health Care Act would have differential impacts on individuals depending on factors such as age, income, geographic location, plan choice, and overall health. In general, the CBO concluded that people who are older, sicker, or receive their coverage through Medicaid will likely see higher costs or lower levels of benefits, while people who are higher income, younger, and healthier are likely to face lower costs or tax savings. In this fact sheet, we summarize the potential impact of the American Health Care Act in Michigan.

Of those who bought coverage in Michigan’s individual market in 2016 many of the:

  • 86,000 people age 18-34 might have received higher tax credits and/or lower premiums relative to the ACA
  • 9,000 people with household incomes above 400% of the federal poverty level ($47,520 for an individual in 2016; currently not eligible for tax credits under the ACA) would receive tax credits under the AHCA (those with annual incomes below $115,000)
  • Estimated 187,000 off-exchange enrollees currently not eligible for tax credits would receive tax credits under the AHCA
  • 100,000 people age 55-64 who selected coverage through Michigan’s Health Insurance Marketplace would face higher costs relative to the tax credits they would receive under AHCA
  • 233,000 people with household incomes below 250% of the federal poverty level ($29,700 for an individual in 2016) would face higher costs over time with potentially lower tax credits and/or when cost-sharing reduction subsidies are repealed in 2020
  • 533,000 people who had individual coverage would be at risk of facing a 30% surcharge with a gap in coverage of more than 63 days

Of those with Medicaid coverage in Michigan in 2016:

  • Among the 649,000 Healthy Michigan Plan beneficiaries, those with a gap in coverage of more than 30 days would be at risk of losing coverage beginning in 2020
  • 1,800,000 “traditional” Medicaid beneficiaries would be at risk of losing benefits and/or seeing provider payments cut beginning October 1, 2019 when per capita cost caps would begin to take effect

Beyond these coverage changes, individuals with annual incomes above $200,000 and couples with annual incomes above $250,000 would see tax cuts as a result of repealing the ACA’s taxes in ACHA. In 2015, approximately 150,000 households in Michigan earned annual incomes of $200,000 or more (data on incomes above $250,000 is not available). In addition, 209,000 Michigan households who paid a tax penalty for not having insurance (the individual mandate penalty) in 2015 would see tax savings as a result of repealing the individual mandate penalty under AHCA.

For more details, see CHRT’s companion piece, “American Health Care Act: Key Provisions and Michigan Implications.”

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Select Affordable Care Act replacement plans and implications

health insurance marketplace

White paper reading "ACA Affordable Care Act" with a stethoscope and pen laid over it.No single replacement for the Affordable Care Act (ACA) has yet emerged. However, there are several ideas that seem to have considerable support among those in health care leadership roles in President Trump’s Administration and Congress.

This brief, Select Affordable Care Act Replacement Plans and Implications, summarizes the key features of the most developed full repeal and replacement plans offered to date.

The provisions that are summarized include:

  • Replace the individual mandate with a continuous coverage requirement
  • Change tax subsidies
  • Expand Health Savings Accounts (HSAs)
  • Allow adult dependents up to age 26 to stay on their parents’ plan
  • Replace the ACA’s “Cadillac Tax” with a cap on the tax exclusion for employer-sponsored insurance
  • Medicaid block grants per capita cost limits
  • Implement high-risk pools
  • Loosen benefit design requirements
  • Widen age bands
  • Permit association health plans
  • Permit interstate insurance sales
  • Reform medical liability

The brief summarizes Representative Paul Ryan’s A Better Way proposal, Representative Tom Price’s Empower Patients First Act, and Senator Richard Burr, Senator Orrin Hatch, and Representative Fred Upton’s The Patient Choice, Affordability, Responsibility, and Empowerment Act. It also details who is primarily affected by each provision and the implications.

You can also see CHRT’s companion piece, ACA Repeal and Replacement: Proposals and Action, for a one-page summary of the plans and tentative process.

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