HR 1628 American Healthcare Act of 2017

(Sec. 101) This bill amends the Patient Protection and Affordable Care Act to eliminate funding after FY2018 for the Prevention and Public Health Fund, which provides for investment in prevention and public health programs to improve health and restrain the rate of growth in health care costs. Funds that are unobligated at the end of FY2018 are rescinded.

(Sec. 102) The bill amends the Medicare Access and CHIP Reauthorization Act of 2015 to increase funding for community health centers.

(Sec. 103) For one year, certain federal funds may not be made available to states for payments to certain family planning providers (e.g., Planned Parenthood Federation of America).

(Sec. 111) The bill amends title XIX (Medicaid) of the Social Security Act (SSAct) to limit the state option for a participating-provider hospital to preliminarily determine an individual's Medicaid eligibility for purposes of providing the individual with medical assistance during a presumptive eligibility period. The bill lowers, from 133% to 100% of the official poverty line, the minimum family-income threshold that a state may use to determine the Medicaid eligibility of children between the ages of 6 and 19. In addition, the bill reduces the Federal Medical Assistance Percentage (FMAP) for Medicaid home- and community-based attendant services and supports.

(Sec. 112) Beginning in 2020, the bill eliminates: (1) the enhanced FMAP for Medicaid services furnished to adult enrollees made newly eligible for Medicaid by PPACA; and (2) the expansion of Medicaid, under PPACA, to cover such enrollees. However, a state Medicaid program may continue to provide coverage, with the enhanced FMAP, to such enrollees who were enrolled prior to 2020 and do not subsequently have any break in eligibility exceeding one month. With respect to states that expanded Medicaid under PPACA, current law provides for transitional FMAP increases through 2019. The bill eliminates these increases after 2017, capping the FMAP at the 2017 level. Under current law, any alternative benefit plan offered by a state Medicaid program is required to provide specified essential health benefits. The bill eliminates this requirement beginning in 2020. ("Essential health benefits" include ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative services, laboratory services, preventative and wellness services, and pediatric services.)

(Sec. 113) The bill eliminates Medicaid Disproportionate Share Hospital (DSH) payment reductions: (1) with respect to states that did not implement Medicaid expansion under PPACA, beginning in FY2018; and (2) with respect to other states, beginning in FY2020. (DSH hospitals receive additional payment under Medicaid for treating a large share of low-income patients.)

(Sec. 114) The bill specifies how a state must treat qualified lottery winnings and lump sum income, beginning in 2020, for purposes of determining an individual's income-based eligibility for a state Medicaid program. Specifically, a state shall include such winnings or income as income received: (1) in the month in which it was received, if the amount is less than $80,000; (2) over a period of two months, if the amount is at least $80,000 but less than $90,000; (3) over a period of three months, if the amount is at least $90,000 but less than $100,000; and (4) over an additional one-month period for each increment of $10,000 received, not to exceed 120 months. An individual whose income exceeds the applicable eligibility threshold due to qualified lump sum income may continue to be eligible for medical assistance to the extent that the state determines that denial of eligibility would cause undue medical or financial hardship. Qualified lump sum income includes: (1) monetary winnings from gambling, and (2) income received as liquid assets from the estate of a deceased individual. In addition, the bill eliminates the requirement for up to three months of retroactive coverage under Medicaid. Under current law, a state Medicaid program must provide coverage for up to three months prior to an individual's application for benefits if the individual would have been eligible for benefits during that period. The bill eliminates this requirement and instead specifies that coverage begins in the month during which the individual applies for benefits. The bill allows a state to delay or deny an individual's initial eligibility for Medicaid benefits without providing a reasonable opportunity to submit evidence of a satisfactory immigration status or pending official verification of such status. A state that elects to provide a reasonable period for an individual to provide such evidence may not receive payment for amounts expended on the individual's medical assistance during that period. In addition, the bill disallows a state from using, for purposes of determining Medicaid eligibility for long-term care assistance, a home equity limit that exceeds the statutory minimum.

(Sec. 115) With respect to states that did not expand Medicaid coverage under PPACA, the bill: (1) with specified limitations, provides for additional federal funding for certain health care services; and (2) through 2022, increases the applicable FMAP. A non-expansion state that subsequently expands Medicaid coverage under PPACA shall become ineligible for this funding.

(Sec. 116) No less frequently than every six months, states must redetermine the eligibility of adult enrollees made newly eligible for Medicaid by PPACA. The bill temporarily increases by 5% the FMAP for expenditures that are attributable to meeting this requirement. In addition, the bill increases the civil penalty for improperly filing certain Medicaid claims related to Medicaid expansion under PPACA.

(Sec. 121) Under current law, state Medicaid programs are guaranteed federal matching funds for qualifying expenditures. The bill establishes limits on federal funding for state Medicaid programs beginning in FY2020. Specifically, the bill establishes targeted spending caps for each state, using a formula based on the state's FY2016 medical assistance expenditures in each enrollee category: (1) the elderly, (2) the blind and disabled, (3) children, (4) adults made newly eligible for Medicaid by PPACA, and (5) all other enrollees. With respect to a state that exceeds its targeted spending cap in a given fiscal year, the bill provides for reduced federal funding in the following fiscal year. In addition, the bill: (1) requires additional reporting and auditing of state data on medical assistance expenditures, and (2) temporarily increases the FMAP with respect to certain data reporting expenditures.

(Sec. 131) After 2019, the bill eliminates cost sharing reductions for low-income individuals with certain health insurance.

(Sec. 132) The bill amends the SSAct to establish and make appropriations for the Patient and State Stability Fund to provide funding to states through 2026, including to: provide financial assistance to high-risk individuals so they may enroll in health insurance, stabilize health insurance premiums, promote participation and increase options in the health insurance market, pay providers for services, and provide financial assistance to enrollees to reduce out-of-pocket costs. Funding is allocated to states based on each state's share of incurred claims and uninsured individuals below the poverty line. To receive funding, states must provide matching funds at a rate that grows from 7% in 2020 to 50% in 2026.

(Sec. 133) Health insurers must increase premiums by 30% for one year for enrollees in the individual or small group market who had a break in coverage of more than 62 days in the previous year.

(Sec. 134) Beginning in 2020, health insurance benefits no longer must conform to actuarial tiers (e.g., silver level benefits).

(Sec. 135) The bill increases the ratio by which health insurance premiums may vary by age, from a three to one ratio to a five to one ratio. This ratio may be preempted by states.

Sections 201-203 of the bill make several modifications to the premium assistance tax credit for a transition period and repeal the credit after 2019. (The credit is currently provided to eligible individuals and families to subsidize the purchase of health insurance plans on an exchange.)

(Sec. 201) This section makes taxpayers liable for the full amount of excess advance payments of the credit. (Under current law, liability for certain low-income households is limited to an applicable dollar amount.)

(Sec. 202) This section modifies the premium assistance tax credit to: make the credit available for catastrophic qualified health plans and plans that are not offered through an exchange, but otherwise meet the requirements for qualified health plans; prohibit the credit from being used for grandfathered or grandmothered health plans; prohibit the credit from being used for health plans that cover abortions (other than abortions necessary to save the life of the mother or abortions with respect to a pregnancy that is the result of an act of rape or incest); and revise the formula used to calculate the credit using a schedule that varies with household income and the age of individuals or family members.

(Sec. 203) This section repeals the premium assistance tax credit for health coverage that begins after December 31, 2019.

(Sec. 204) This section modifies the small employer tax credit for employee health insurance expenses to: (1) prohibit the credit from being used for health plans that include coverage for abortions (other than any abortion necessary to save the life of the mother or any abortion with respect to a pregnancy that is the result of an act of rape or incest) for taxable years beginning after December 31, 2017; and (2) repeal the credit for taxable years beginning after December 31, 2019.

(Sec. 205) This section repeals the penalties for individuals who are not covered by a health plan that provides at least minimum essential coverage (commonly referred to as the individual mandate). The repeal is effective for months beginning after December 31, 2015.

(Sec. 206) This section repeals the penalties for certain large employers who do not offer full-time employees and their dependents minimum essential health coverage under an employer-sponsored health plan (commonly referred to as the employer mandate). The repeal is effective for months beginning after December 31, 2015.

(Sec. 207) This section delays the implementation of the excise tax on high cost employer-sponsored health coverage (commonly referred to as the Cadillac tax) until 2025. (Under current law, the tax goes into effect in 2020.)

(Sec. 208) This section permits tax-favored health savings accounts (HSAs), Archer Medical Savings Accounts (MSAs), health flexible spending arrangements (FSAs), and health reimbursement arrangements to be used to purchase over-the-counter medicine that is not prescribed by a physician.

(Sec. 209) This section repeals the increase in the tax on distributions from HSAs and Archer MSAs that are not used for qualified medical expenses. The bill reduces the tax on HSA distributions from 20% to 10% and reduces the tax for Archer MSA's from 20% to 15% to return the taxes to the levels that existed prior to the enactment of PPACA.

(Sec. 210) This section repeals the limitation on FSA salary reduction contributions.

(Sec. 211) This section repeals the medical device excise tax for sales in calendar years beginning after December 31, 2017.

(Sec. 212) The provision permits employers who provide Medicare-eligible retirees with qualified prescription drug coverage and receive federal subsidies for prescription drug plans to claim a deduction for the expenses without reducing the deduction by the amount of the subsidy.

(Sec. 213) This section repeals the increase in the income threshold used to determine whether an individual may claim an itemized deduction for unreimbursed medical expenses. The bill allows all taxpayers to claim an itemized deduction for unreimbursed expenses medical expenses that exceed 7.5% (10% under current law) of adjusted gross income.

(Sec. 214) This section repeals the additional Medicare tax that is imposed on certain employees and self-employed individuals with wages or self-employment income above specified thresholds.

(Sec. 215) The section establishes a refundable, advanceable tax credit beginning in 2020 for certain taxpayers who purchase health insurance and who are not eligible for other sources of coverage. The credit applies for health insurance coverage that: is offered in the individual health insurance market within a state or is unsubsidized COBRA continuation coverage; is not a grandfathered or grandmothered plan; substantially all of which is not for excepted benefits providing only limited coverage, such as dental, vision, or long-term care; does not include coverage for abortions (other than any abortion necessary to save the life of the mother or any abortion with respect to a pregnancy that is the result of an act of rape or incest); does not consist of short-term limited duration insurance; and is certified by the state in which the insurance is offered as meeting the requirement of this bill. The bill specifies credit amounts which are based on age and adjusted gross income. It also limits the annual credit amount to $14,000 per family. If the amount paid for the insurance is less than the credit amount, Treasury may deposit the excess into an HSA of the individual or a qualifying family member as designated by the individual. The Department of the Treasury must establish a program not later than January 1, 2020, for making advance payments to providers of eligible health insurance on behalf of individuals eligible for the credit. The bill specifies reporting requirements for health insurance providers who provide eligible health insurance coverage to individuals.

(Sec. 216) This section increases the limits on HSA contributions to match the sum of the annual deductible and out-of-pocket expenses permitted under a high deductible health plan.

(Sec. 217) This section permits both spouses of a married couple who are eligible for HSA catch-up contributions to make the contributions to the same HSA account.

(Sec. 218) This section permits an HSA to be used to pay certain medical expenses that were incurred before the HSA was established. If the HSA is established during the 60-day period beginning on the date that an individual's coverage under a high deductible health plan begins, the HSA is treated as having been established on the date coverage under the high deductible health plan begins to determine whether an amount paid is used for a qualified medical expense.

(Sec. 221) This section repeals the annual fee on branded prescription pharmaceutical manufacturers and importers.

(Sec. 222) This section repeals the annual fee imposed on certain health insurance providers based on market share.

(Sec. 231) This section repeals the 10% excise tax on the price of indoor tanning services.

(Sec. 241) The section repeals a provision that prohibits certain health insurance providers from deducting remuneration paid to an officer, director, or employee in excess of $500,000.

(Sec. 251) This section repeals the 3.8% tax on the net investment income of individuals, estates, and trusts with incomes above specified amounts.

For comparison, here is the Congressional Research Service summary of the “Obamacare Repeal” Bill Passed by the House and Senate and vetoed by President Obama.

https://www.congress.gov/bill/114th-congress/house-bill/3762?r=1

Shown Here:
Passed Senate amended (12/03/2015)

TITLE I—HEALTH, EDUCATION, LABOR, AND PENSIONS

(Sec. 101) This bill amends the Patient Protection and Affordable Care Act (PPACA) to terminate the Prevention and Public Health Fund, which provides for investment in prevention and public health programs to improve health and restrain the rate of growth in health care costs. Unobligated funds are rescinded.

(Sec. 102) Funding for community health centers is increased.

(Sec. 103) Certain funding for U.S. territories that establish health insurance exchanges is no longer available after 2017.

(Sec. 104) The Department of Health and Human Services (HHS) may not collect fees or make payments under the transitional reinsurance program.

(Sec. 105) This bill makes appropriations for FY2016 and FY2017 for HHS to award grants to states to address substance abuse or to respond to urgent mental health needs.

TITLE II—FINANCE

(Sec. 201) This bill amends the Internal Revenue Code to require individuals to pay back the full amount of advance payments in excess of their premium assistance tax credit. (Currently, there is a limit on the amount of excess an individual must pay back.)

(Sec. 202) Provisions relating to the premium assistance tax credit, reduced cost-sharing, and eligibility determinations for these subsidies are repealed on December 31, 2017.

(Sec. 203) The small employer health insurance tax credit does not apply after 2017. (This credit is for certain employers who make contributions toward employee health coverage purchased through a health insurance exchange.)

(Sec. 204) The penalty for individuals who do not maintain minimum essential health care coverage is eliminated.

(Sec. 205) Large employers are no longer required to make shared responsibility payments.

(Sec. 206) For one year, this bill restricts the availability of federal funding to a state for payments to an entity (e.g., Planned Parenthood Federation of America) that:

is a 501(c)(3) tax-exempt organization;
is an essential community provider primarily engaged in family planning services and reproductive health;
provides for abortions other than abortions in cases of rape or incest, or where a physical condition endangers a woman’s life unless an abortion is performed; and
received a total of more than $350 million under Medicaid in FY2014, including payments to affiliates, subsidiaries, successors, or clinics.

(Sec. 207) This bill amends part A (General Provisions) of title XI of the Social Security Act (SSAct) to require the additional payments to U.S. territories for Medicaid under the Health Care and Education Reconciliation Act of 2010 to be made by the end of FY2017 instead of the end of FY2019.

This bill amends title XIX (Medicaid) of the SSAct to end the expansion of Medicaid under PPACA on December 31, 2017.

After 2017, hospitals may no longer elect to provide Medicaid services to individuals during a presumptive eligibility period.

States must maintain Medicaid eligibility standards for individuals under 19 years old through FY2017 instead of through FY2019.

The federal medical assistance percentage (FMAP, the federal matching rate for Medicaid expenditures) for U.S. territories is 50% after 2017 (currently, the FMAP is 55%).

The increased FMAP for childless adults and home and community-based attendant services under PPACA ends December 31, 2017.

After 2017, states may no longer elect to provide certain individuals with a presumptive eligibility period for Medicaid.

Medicaid benchmark plans are no longer required to provide minimum essential health benefits after 2017.

After 2017, states are no longer required to operate a website for Medicaid enrollment that is linked to the state’s health benefit exchange and Children’s Health Insurance program (CHIP).

(Sec. 208) Medicaid allotments for disproportionate share hospitals are increased.

(Sec. 209) The excise tax on high cost employer-sponsored health coverage (popularly known as the “Cadillac tax”) does not apply after 2017.

(Sec. 210) Health savings accounts (HSAs), Archer medical savings accounts (MSAs), health flexible spending arrangements (HFSAs), and health reimbursement arrangements may be used to pay for over-the-counter medications.

(Sec. 211) This bill lowers the tax on distributions from HSAs and Archer MSAs that are not used for medical expenses.

(Sec. 212) Salary reduction contributions to an HFSA under a cafeteria plan are no longer limited.

(Sec. 213) The annual fee on manufacturers and importers of brand name prescription drugs is eliminated.

(Sec. 214) The excise tax on medical devices is eliminated.

(Sec. 215) The annual fee on health insurers is eliminated.

(Sec. 216) Medical costs are allowed as a tax deduction regardless of whether the costs are taken into account when determining the amount of the subsidy for an employer-sponsored retiree prescription drug plan under Medicare part D (Voluntary Prescription Drug Benefit Program).

(Sec. 217) A tax deduction is allowed for medical expenses in excess of 7.5% (currently, 10%) of adjusted gross income.

(Sec. 218) The additional Medicare tax on income above a certain threshold is eliminated.

(Sec. 219) The indoor tanning services tax is eliminated.

(Sec. 220) The net investment income tax is eliminated.

(Sec. 221) A health insurer is allowed a tax deduction for the full amount of an employee’s compensation. (Currently, there is a limit on the amount of an employee’s compensation that a health insurer may deduct.)

(Sec. 222) Provisions relating to the economic substance doctrine are repealed. (The economic substance doctrine treats a transaction as having economic substance if it has a purpose other than reducing income taxes. Currently, there are penalties for claiming tax benefits for transactions without economic substance.)

(Sec. 223) Funds are transferred from the Department of the Treasury to the Federal Hospital Insurance Trust Fund.

SEC. 205. INDIVIDUAL MANDATE.

(a) IN GENERAL.—Section 5000A(c) of the Internal Revenue Code of 1986 is amended—

  (1) in paragraph (2)(B)(iii), by striking ‘‘2.5 percent’’ and inserting ‘‘Zero percent’’, and

  (2) in paragraph (3)—

    (A) by striking ‘‘$695’’ in subparagraph (A) and inserting ‘‘$0’’, and

    (B) by striking subparagraph (D).

http://docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=105944


Relevant part of the Internal Revenue Code of 1986:

26 U.S. Code § 5000A - Requirement to maintain minimum essential coverage

(2) Monthly penalty amounts
    For purposes of paragraph (1)(A), the monthly penalty amount with respect to any taxpayer for any 
    month during which any failure described in subsection (b)(1) occurred is an amount equal to 1⁄12 
    of the greater of the following amounts:

  (A) Flat dollar amount
      An amount equal to the lesser of—

    (i) the sum of the applicable dollar amounts for all individuals with respect to whom such failure 
        occurred during such month, or

    (ii) 300 percent of the applicable dollar amount (determined without regard to paragraph (3)(C)) for
         the calendar year with or within which the taxable year ends.

  (B) Percentage of incomeAn amount equal to the following percentage of the excess of the taxpayer’s 
      household income for the taxable year over the amount of gross income specified in section 6012(a)(1) 
      with respect to the taxpayer for the taxable year:

    (i) 1.0 percent for taxable years beginning in 2014.

    (ii) 2.0 percent for taxable years beginning in 2015.

    (iii) 2.5 percent for taxable years beginning after 2015.

(3) Applicable dollar amountFor purposes of paragraph (1)—

  (A) In general
      Except as provided in subparagraphs (B) and (C), the applicable dollar amount is $695.

  (B) Phase in
      The applicable dollar amount is $95 for 2014 and $325 for 2015.

  (C) Special rule for individuals under age 18
      If an applicable individual has not attained the age of 18 as of the beginning of a month, the applicable
      dollar amount with respect to such individual for the month shall be equal to one-half of the applicable 
      dollar amount for the calendar year in which the month occurs.

  (D) Indexing of amount
      In the case of any calendar year beginning after 2016, the applicable dollar amount shall be equal to 
      $695, increased by an amount equal to—

    (i) $695, multiplied by

    (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by 
         substituting “calendar year 2015” for “calendar year 1992” in subparagraph (B) thereof. If the amount 
         of any increase under clause (i) is not a multiple of $50, such increase shall be rounded to the next 
         lowest multiple of $50.

https://www.law.cornell.edu/uscode/text/26/5000A

It's the same scheme with the employer mandate, leave the structure and set the rates to zero.


206. Employer mandate

  (a) In general

    (1) Paragraph (1) of section 4980H(c) of the Internal Revenue Code of 1986 is amended by 
        inserting "($0 in the case of months beginning after December 31, 2015)" after "$2,000".

    (2) Paragraph (1) of section 4980H(b) of the Internal Revenue Code of 1986 is amended by 
        inserting "($0 in the case of months beginning after December 31, 2015)" after "$3,000".

https://www.govtrack.us/congress/bills/115/hr1628/text/rh#link=II_A_206&nearest=H3CC573CB359B46DFBFDB6948B078E716


26 U.S. Code § 4980H - Shared responsibility for employers regarding health coverage

https://www.law.cornell.edu/uscode/text/26/4980H

Neither the individual mandate nor the employer mandate have been repealed. The penalty amounts have been set to zero, yet the mandate and the structure remain.

Why does the mandate remain?

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