7 Things to Know About the Big New House ACA Update Package

Members of the U.S. House are preparing to vote on an Affordable Care Act (ACA) update package that could increase health insurers’ individual major medical revenue by more than $257 billion over 10 years, adding funding for ACA subsidy programs.

Resources

• Links to a collection of H.R. 1425 resources, including the final House Rules Committee print of the bill, are available here.
• The Congress.gov tracking page for H.R. 1425 is available here.
• A Congressional Budget Office analysis of the Rules Committee print version of the bill is available here.
• An article about an earlier version of the Craig health insurance bill is available here.

House Majority Leader Steny Hoyer, D-Md., announced Wednesday that House leaders’ plan to bring the bill — an expanded version of H.R. 1425, the “Patient Protection and Affordable Care Act Enhancement Act” bill — up for a vote Monday.

“Our bill encourages every state to expand Medicaid and aims to lower monthly premiums and out-of-pocket costs by providing more generous cost-saving subsidies and tax credits to help people better afford coverage under marketplace plan,” Hoyer said in a comment in the bill.

Here are seven other things to know about the bill.

1. The bill has been around for more than a year.

Rep. Angie Craig, D-Minn., introduced a shorter version of H.R. 1425 in February 2019. Craig’s version would have provided $10 billion in funding per year for state individual health insurance reinsurance programs.

2. The bill has grown.

The House Rules Committee released the current version of the bill, the House Rules Committee Print 116-56 version, Monday.

That version fills 154 PDF pages.

3. The expanded version would expand several existing ACA commercial health insurance subsidy programs, fill holes, and add new programs.

If passed and implemented as written, the bill would:

• Increase the existing ACA premium tax credit subsidy program for commercial health insurance. The CBO analysts say this provision would increase spending by $212 billion over 10 years. Most of that money would go to health insurers. Health insurers would then spend at least 80% of the extra revenue on health care and health care quality improvement efforts.
• Add subsidies to help low-income premium tax credit users pay deductibles, co-payments, coinsurance amounts and other out-of-pocket amounts. This provision would provide $6.2 billion over 10 years to replace the ACA cost-sharing subsidy reduction program, which Republicans in Congress have declined to fund.
• Based determinations about whether coverage for a worker is “affordable” by looking at the worker’s entire family, not just the worker. “Fixing the family glitch” would cost $45 billion over 10 years, according to the CBO analysts.
• Provide $16 billion over 10 years that states could use to pay for a variety of health insurance affordability programs, such as reinsurance programs.
• Provide $200 million in grants, over 10 years, that states could use to set up state-based public exchange programs.

The bill would also kill the current short-term health insurance regulations, which let states give insurers the option of keeping short-term health insurance arrangements in place for up to three years.

4. The bill also would increase Medicaid funding.

The CBO analysts say one of the Medicaid section provisions, which would provide 12 months of continuous eligibility for participants in Medicaid and Children’s Health Insurance Program (CHIP) plans, rather than requiring participants with fluctuating income to bounce back and forth between commercial coverage and Medicaid or CHIP coverage, would cost about $205 billion over 10 years.

The second most expensive provision, a pay increase for primary care physicians who treat patients with CHIP or Medicaid coverage, could cost $65 billion over 10 years.

5. Democrats would pay for the coverage expansion provisions by calling for Medicare to negotiate for lower drug prices.

The CBO analysts say this provision could save about $582 billion over 10 years, with peak annual savings of $141 billion, in 2029.

6. The CBO thinks the bill could reduce the federal budget deficit a bit.

The CBO analysis shows that the Medicare drug price negotiations provision could save enough money to make the whole package lead to about $15 billion in reductions in the federal budget deficit over 10 years.

The savings would be small relative to the size of the federal budget deficit: The U.S. federal government now has about $20 trillion in national debt, and it has run up a deficit of $1.9 trillion for the first eight months of federal fiscal year 2020, which started Oct. 1, 2019.

7. The fate of the bill is probably easy to predict, but might not be that easy to predict.

Democrats have 223 of the 435 seats in the House and are almost certain to pass H.R. 1425 there Monday.

Republicans hold 53 of the 100 seats in the Senate and typically pass over House bills like H.R. 1425 without even holding committee hearings on he bills.

But Republican senators have worked with Democratic senators on some health bills, and Republicans have shown some willingness to consider Affordable Care Act change bills that would continue to allocate large sums for health insurance subsidies.

In 2017, Sen. Bill Cassidy, R-La., introduced an Affordable Care Act change bill, the Graham-Cassidy-Heller-Johnson bill draft, that could have replaced the current ACA subsidies with more $136 billion in health insurance block grant funding for 2020. The block grant totals in that proposal would have grown every year, and increased to $200 billion by 2026.

— Read 10 Medicare for All and Graham-Cassidy Highlights, for Agents, on ThinkAdvisor.

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