09 March 2017 House Ways & Means, Energy & Commerce panels complete marathon markups of ACA repeal bill Democrats upset with GOP's timetable prolong process into all-night sessions; 'American Health Care Act' now goes to house budget committee, then rules panel After marathon markup sessions that went through Wednesday night and into the following day, two House committees on Thursday, March 9, approved their pieces of House Republicans' legislation to repeal and replace the 2010 Affordable Care Act (ACA), wading through Democrats' delaying tactics and rejecting dozens of amendments. The measures reported out by the House Ways and Means Committee and Energy and Commerce Committee will now go to the House Budget Committee on Wednesday, March 15, to be joined together as a single budget-reconciliation bill and then move to the House floor, after a stop at the Rules Committee. House Speaker Paul Ryan (R-WI) has said the Republican leadership plans floor votes on the American Health Care Act before Congress adjourns for the Easter recess on April 7. The Ways and Means Committee approved its portion of the repeal measure on a party-line, 23-16 vote at 4:30 a.m. Thursday morning. The Energy and Commerce Committee approved its measure, 31-23, early Thursday afternoon after working through amendments, delays and objections for more than 27 hours, including various recesses. Attached with this Alert please find a staff summary of the Energy & Commerce measure and the text of the substitute amendment ultimately approved by that committee. The Ways and Means Committee has posted text of the five titles and substitute amendments from its markup here, and Energy and Commerce has posted its own materials here. After working through the day and night, the Ways and Means Committee approved its portion of the repeal bill early this morning by a party-line vote of 23-16. The committee's legislation dealt with repeal of a number of the ACA's related tax provisions and the creation of new age-adjusted tax credits to support the purchase of individual health insurance. At the outset of the markup, Chairman Kevin Brady (R-TX) highlighted the measure's repeal of penalties associated with the individual and employer mandates; its expansion of health savings accounts (HSAs); and a new refundable, advanceable monthly tax credit to help low- and middle-income Americans purchase coverage on the individual market. Ranking Member Richard Neal (D-MA) and other Democrats derided the expedited timetable for considering the repeal bill, with a markup occurring only 36 hours after the bill had been released, and said it was irresponsible to proceed without a Congressional Budget Office (CBO) revenue and distributional analysis. Sander Levin (D-MI) said Democrats had "just begun to fight this bill." Speaker Ryan said he expected CBO to weigh in early next week, before the bill is considered on the House floor. The committee considered the measure in five separate subtitles. In the markup's early going, the committee spent several hours considering the first subtitle, under which the $500,000 limit on the deduction of compensation for certain officers, directors or employees of insurance providers would no longer apply for tax years beginning after December 31, 2017. The subtitle was eventually approved 23-16, along party lines. Ranking Member Neal said it was odd to start the markup by addressing excessive executive compensation, and Lloyd Doggett (D-TX) said the change would amount to taxpayers' subsidizing executive pay. An amendment by Linda Sanchez (D-CA) to repeal the "Cadillac tax" on high-cost plans — currently scheduled to take effect in 2020, and delayed until 2025 under the Republicans' bill — was rejected on a 23-16 vote, defeating an appeal of the ruling of the chairman that the amendment was non-germane. Joint Committee on Taxation Chief of Staff Tom Barthold cited projections that the Cadillac tax would potentially affect 7 million policyholders in 2020. Several other Democratic amendments to the second subtitle failed to overcome rulings that they were non-germane, including amendments by: — Earl Blumenauer (D-OR) requiring the bill to be certified as meeting the promise of "insurance for everybody" — Rep. Levin requiring the score of the bill be made public for at least seven days before a vote on the bill the House — Ron Kind (D-WI) requiring certification that the bill is paid for and does not increase the deficit — John Lewis (D-GA) to provide that the bill cannot go into effect without a determination that no one will lose coverage — Danny Davis (D-IL) to prohibit the bill from reducing coverage for mental health and opioid treatments Ranking Member Neal's amendment requiring Congress to certify that the bill does not increase uncompensated care was also ruled out of order. Rep. Thompson argued that Neal's amendment should not be considered outside the scope of consideration because hospitals are major employers. The second subtitle, to repeal the tanning tax under the ACA at a cost of $600 million from 2017-2026, was approved 24-15 over objections from Democrats that tanning is a health hazard. The bill's third subtitle, to repeal certain consumer taxes — the annual fee on branded prescription pharmaceutical manufacturers and importers, at a cost of $25 billion from 2017-2026, and the annual fee on health insurance providers, at a cost of $145 billion over 10 years — was approved, 24-16. Rep. Levin said the majority was "giving back to the pharmaceutical industry essentially what they agreed to some years ago" when the ACA was developed, which is a "serious mistake." Several Republicans raised concerns about the effect of the ACA's excise tax provisions on health care costs. In response to a question from Tom Rice (R-SC) about whether fees or taxes on insurance companies are passed through to consumers, JCT Chief of Staff Barthold said, "We think the economic analysis that's appropriate for these sorts of fees, excise taxes, is that, like an excise tax, they end up in the price of the product to the consumer." Rep. Blumenauer offered an amendment to strike repeal of the pharmaceutical fee and dedicate its revenue to the Federal Supplemental Medical Insurance Trust Fund to help finance Medicare Part B and D, which was defeated on a 16-24 vote along party lines. Susan DelBene (D-WA) offered an amendment to retain funding for Planned Parenthood, which was ruled non-germane. The committee approved the bill's fourth subtitle, which would repeal the 3.8% tax on net investment income beginning after December 31, 2017 (with an estimated cost of $157.6 billion 2017-2026), by a vote of 24-15. Rep. Doggett and other Democratic members said repealing the provision would benefit those at the "top of the economic ladder." The committee then approved the final title of the bill, which included the bulk of its policy changes, addressing issues that include: Rep. DelBene offered another amendment to repeal the Cadillac tax, which was defeated on a 16-24 vote. Erik Paulsen (R-MN) said it is ironic that Democrats are working to get rid of the tax because it was enacted under the ACA. Referring to a provision in an earlier draft of the bill that would have partially removed the exclusion on taxation of employer-sponsored health benefits, Paulsen said he hoped the Cadillac tax could ultimately be replaced with "the more transparent limitation on overly generous job-based coverage." As in the Ways and Means markup, Democrats objected to the committee's timetable for marking up the repeal bill and the absence of a CBO score. Much of Wednesday was spent working through delays, as Democrats forced the reading of the bill by clerks, Chairman Greg Walden (R-OR) fielded constant parliamentary inquiries from Ranking Member Frank Pallone Jr. (D-NJ), and Democrats regularly moved to "strike the last word" during debate, giving five-minute speeches objecting to the repeal effort. The markup also had to recess several times as Democrats forced floor votes on motions to adjourn. The final vote on Chairman Walden's substitute amendment was 31-23, along party lines. In a statement after the marathon session ended, Chairman Walden said, "After conducting an open and transparent markup, we are proud to put forth a plan that represents a Better Way for patients and families. Under our plan, we preserve important provisions like protecting patients with pre-existing conditions while implementing important reforms to provide states with greater flexibility, lower cost for families and greater choice for patients." In his own statement, Ranking Member Pallone said the repeal bill constituted "taking from hard-working families and giving to the rich. In fact, according to the [JCT], the bill would cut taxes for the rich and corporations by about $600 billion. So billionaires will benefit, while Republicans dump huge out-of-pocket costs on working families. Frankly, this is a disgrace." The Energy & Commerce Committee's portion of the legislation repeals key elements of the ACA, significantly reforms the Medicaid program and also attempts to stabilize the individual insurance market during the transition between the ACA and the newly reformed health system envisioned by the Republicans. The bill also preserves some of the consumer protections included in the ACA like the ability for children to stay on their parents' health plan until age 26 and does not reinstate the caps on annual or lifetime health plan limits that were repealed by the ACA. Market stabilization. Thecommittee made several policy changes in an effort to stabilize the individual insurance market and ensure a smooth transition period to the new system. The legislation requires individuals to maintain continuous health insurance coverage or risk paying up to 30% more in premiums instead of the individual mandate penalty for failing to purchase coverage in the ACA. The goal of this late enrollment penalty is to encourage individuals to purchase health coverage instead of waiting until they become sick, which insurers believe would contribute to a more stable risk pool. The legislation would create a Patient and State Stability Fund designed to make insurance more affordable, which can be used to create high-risk pools, assist people with out-of-pocket costs or start a reinsurance program. States must apply for the funding, which will total $100 billion over 10 years. The bill requires states to contribute a portion of the monies that make up the fund. In 2020, the bill would also eliminate cost-sharing subsidies provided under the ACA — an important priority for many insurance providers. Litigation is also pending on the cost-sharing matter. The bill would eliminate the ACA's actuarial value thresholds for its gold, silver and bronze tiers, and change the ACA's age-rating restriction to allow insurers to charge older individuals up to five times the amount of younger individuals, compared with the 3:1 ratio included in the ACA. Republicans made these changes to create more flexibility in the health benefit design options available to individuals purchasing insurance, and to allow greater variation on the level of premiums that insurers can charge based on the anticipated cost of the individual, to encourage them to continue offering coverage. Medicaid. Beginning in 2020, States that had expanded coverage under the ACA would no longer be able to extend coverage to individuals over 133% of the federal poverty line. The bill would also repeal the enhanced federal match rate for individuals enrolled in Medicaid after December 31, 2019. Also beginning in fiscal 2020, the bill would transition federal payments to states in Medicaid to a per-capita allotment approach. This approach would establish per enrollee limits on federal payments to states based on the category of the enrollee. Republicans expressed both a desire to "put Medicaid on a budget" at the markup and also to provide incentives for states to prioritize those most in need, including the elderly, blind and disabled over populations covered by the ACA Medicaid expansion. Based on the size of the state's enrollment beginning in the base year of 2016, federal payments would grow based on those enrollment numbers, but be limited by the capped amount the state is eligible to receive based on the category of the enrollee. Those federal payments would increase according to the rate of the medical component of the Consumer Price Index (CPI) in future years. The bill takes steps to encourage states to adopt more flexible insurance benefit options by ending the Medicaid essential health benefits requirement for beneficiaries enrolled in the Medicaid program by December 31, 2019. The bill would also require states with Medicaid expansion populations to reevaluate the eligibility of those enrollees every six months. The ACA's scheduled cuts in funding to Medicaid disproportionate share hospitals (DSH) would not apply in Medicaid non-expansion states beginning in 2018. For states that did expand Medicaid, the DSH cuts would be repealed in 2020. Joe Barton (R-TX), a former chairman of the committee, introduced and later withdrew two amendments that he said had the support of the House's conservative Freedom Caucus and Republican Study Committee. The amendments would: 1) accelerate the repeal of the ACA's Medicaid expansion to the end of this year instead of 2020, and 2) put an end date on the enhanced federal match in Medicaid. Other than Chairman Walden's substitute amendment and another amendment from Walden with technical corrections, the committee did not approve any amendments during the markup. The committee rejected 17 Democratic amendments, ranging from one by Ranking Member Pallone that would have changed the title of the bill to "The Republican Pay More for Less Care Act" to an amendment from Kathy Castor (D-FL) that would have prohibited the bill's provisions from becoming effective until the CBO certifies it will result in lower health care costs and no increase in premium rates. — Anna Eshoo (D-FL) requiring that nothing in the bill would affect the ACA's provisions on patient protections, including non-discrimination provisions related to pre-existing conditions and women being charged more than men — Diana DeGette (D-CO) striking the bill's section prohibiting federal funds from being made available to states for the purposes of payments to any 501(c)(3) that is primarily engaged in family planning services while also providing abortions — Ranking Member Pallone striking Section 121 of the bill converting Medicaid to a per-capita allotment — Peter Welch (D-VT) striking section 112 of the bill that "sunsets" the ACA's essential health benefits requirement — Rep. Welchprohibiting any provision in the bill from taking effect until the HHS secretary submits to Congress a certification by CBO that the bill would lower prescription drug prices — G.K. Butterfield (D-NC) striking section 133 of the bill imposing penalties for lack of continuous health care coverage for individuals purchasing insurance in the individual or group markets — Debbie Dingell (D-MI) prohibiting the per capita Medicaid cap from taking effect if the cap negatively affects seniors' access to long-term health care services. Two amendments were offered and withdrawn: 1) from Tim Murphy (R-PA) that would have provided a sense of Congress that the ACA did not modify mental health parity laws; and 2) a Medicaid cost-sharing amendment from Chris Collins (R-NY) that would have required a state's excess aggregate medical assistance expenditures amount to be increased by the amount that political subdivisions are required to contribute toward medical assistance under the state plan. Document ID: 2017-0449 |
