Earlier today the House passed their first major bill since the beginning of the this year. “Repeal and Replace” has been their battlecry for more than 7 years now and they have finally started to deliver. After failing multiple times to bring a healthcare bill to the floor for a vote, they finally hit the 216 vote threshold they had been reaching for. With 217 votes for and 213 against, they were able to just squeak by a victory.

While this version of the bill has yet to be scored by the Congressional Budget Office (CBO), we have the previous report to give us some guidelines as to how this bill will affect healthcare going forward. So lets take a look at some of the major provisions in the bill:

  • Pre-existing conditions are covered under the AHCA, but allows states to get waivers* to let insurance companies charge these enrollees more when they have a lapse in coverage.
  • $138 billion will be given to states over the course of ten years. The states will have the power to direct that money to help with any number of healthcare related cost problems.
  • States can also choose to get a waiver* to change or remove the requirements regarding essential health benefits.
  • The individual mandate remains, but enrollees will pay a 30% premium penalty to the insurance company for their first year as opposed to a yearly fine.
  • A tax credit program will be implemented and based on age. Under the ACA it was based on income and location.
  • Medicaid expansion that was introduced under ACA would be frozen. It would also convert it to have a lump sum per enrollee or pure lump sum for the entire state as opposed to the current open-ended payment system. In other words, there will be a cap placed on the enrollee’s medical expenditures. This is expected to save $880 billion over the next ten years.
  • $600 billion in taxes cut over the next ten years that were put into place to help fund the ACA. It removes a 3.8% investment income tax and 0.9% wage tax on households making >$250,000. It also removes taxes on insurance, pharmaceutical and medical device companies. In other words, only those with incomes over $250,000 will benefit from this tax cut.
  • Planned Parenthood would be defunded for one year if they didn’t stop offering abortions. Approximately 60% of planned parenthood patients receive their healthcare through government funded programs like medicaid.
  • Companies will not be required to supply healthcare to their employees.
  • Older enrollees could have their premiums be five times higher than that of younger enrollees (as opposed to three times higher in ACA). States are then allowed to apply for a waiver* that would allow them to increase this ratio.
  • Congress is not exempt from the bill. This amendment was added at the last minute after significant backlash from the public.

*They would need to meet a certain set of standards to get these waivers. The standards revolve around “encouraging fair health insurance premium“.

Until we get a CBO score back, it’s hard to know how these provisions will affect most Americans.

The next major step is for the Senate to take a crack at it. The Republicans in the Senate are hoping to do this under Budget Reconciliation; this would only require 51 votes to pass the bill as opposed to the normal 60. Considering there are only 52 Republicans and 48 Democrats this will be an even closer vote than in the House. On top of that, the Senate won’t be able to vote on this bill until after the CBO report comes out, which may be a few weeks. So it may not be until June that the Senate is able to move forward. Budget reconciliation can only be used once per fiscal year, so Republicans are hoping to complete this before October, so they save their next reconciliation for tax reform.

Apart from a tight Senate vote and tight timeline, bridging the gap between the House and the Senate agendas is another major hurdle that Republicans will need to handle. During negotiations in the House, the bill has moved farther and farther to the right, which raises concerns for it’s ability to pass in the Senate. So if the Senate makes too many changes, it may not be agreeable back in the House.

One thing is for sure, we will see many more negotiations and deals made regarding healthcare over the next few months.