U.S. Capitol building in Washington, D.C. October 9, 2016. U.S. Capitol building in Washington. (Photo: Mike Scarcella/ALM)

Republicans in the U.S. House avoided a chance this week to use the Affordable Care Act premium tax credit subsidy as a club to attack abortion benefits mandates in states like New York state and Washington state.

House members voted 242-176 Wednesday for H.R. 6311.

The current, heavily amended version of H.R. 6311 could expand personal health account access; let all consumers, not just young adults and high earners, buy bare-bones “copper plan” coverage; and let the ACA health insurance tax moratorium now scheduled for 2019 last until 2021.

But the current version leaves out sections that could led to dramatic changes in how consumers could use the ACA premium tax credit subsidy.

(Related: House Passes HSA Bills to Expand Access, Boost Contribution Limits)

Rep. Peter Roskam, R-Ill., introduced the bill July 6.

The Two Proposed Changes That Got Cut Out

Roskam wanted to let a consumer use the ACA premium tax credit subsidy to pay for individual major medical coverage purchased outside the ACA public exchange system.

That proposed change could have helped insurers increase sales of off-exchange major medical insurance without having to pay ACA public exchange shelf space fees.

Typical public exchange programs are now charging issuers amounts equal to about 3% of the premiums or more to put their products on the exchange shelves. Exchange program managers use the fee revenue to handle compliance matters, run their computers, and market their websites to consumers and brokers.

Roskam also wanted to forbid consumers from using ACA premium tax credit money to pay for any major medical coverage that included coverage for abortion, other than an abortion necessary to save the life of the mother, or an abortion with respect to a pregnancy resulting from an act of rape or incest.

Rep. Suzan DelBene, D-Wash.., told colleagues at a House Ways and Means Committee  bill review meeting July 11 that the original version of the bill could keep residents of states with abortions benefits mandate for health insurers from using the ACA premium tax credit subsidy at all.

The list of states with abortion benefits mandates includes California, New York state, Pennsylvania and Oregon as well as Washington state.

If the provision had stayed in H.R. 6311, the Senate had passed the bill, and the bill had become law, lawmakers in those states might have faced new pressure to repeal their abortions benefits mandates.

House leaders took those premium tax credit provisions out of the bill text between the time the House Ways and Means Committee approved it, on July 19, and on July 23 when members of the House Rules Committee packaged the bill for action on the House floor.

 

The ACA Premium Tax Credit Subsidy

The ACA premium tax credit subsidy gives moderate-income consumers help with paying for health coverage purchased from an ACA public exchange program.

Most exchange plan users use the tax credit in the form of an “advance premium tax credit” (APTC).

That means they can use the the tax credit help to pay for coverage during the current year, based in estimates of how much they’ll earn during the current year. The consumers now using the credit to pay for 2018 exchange plan coverage, for example, are getting tax credits based on what they told exchange programs they expect to earn in 2018.

The subsidy money goes straight to the health insurers, not to the consumers.

Those consumers are supposed to reconcile their 2018 actual income with their expected 2018 income in early 2019, when they file their income taxes for 2019. Some will get extra cash back from the Internal Revenue Service, and some will have to pay extra money in.

About 83% of the people who have signed up for exchange plan coverage are using the APTC subsidy to help their out-of-pocket spending on health insurance premium bills, according to the Centers for Medicare and Medicaid Services.”

The Future

Some ideas circulate on Capitol Hill for years, or decades before becoming law.

Members of the Senate could still add Roskam’s original off-exchange APTC use and abortion benefits provisions back in to the bill.

Those provisions could also show up later, either as stand-alone bills or as additions to other legislation.

— Read Bill Could Strip ACA Premium Subsidies from New York and Pennsylvania Residents, on ThinkAdvisor.

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