In mid-September, Sens. Lindsey Graham and Bill Cassidy, along with Sens. Dean Heller and Ron Johnson, released the Graham-Cassidy-Heller-Johnson (GCHJ) bill which repeals the Affordable Care Act (ACA) and replaces it with an annual block grant to states to help individuals pay for healthcare.
Due to procedural rules in the Senate, the clock is ticking on Senate Republicans’ ability to repeal and replace the ACA. The deadline to pass the bill with a simple majority of 51 votes is Sept. 30. Otherwise, to pass by a simple majority, it would have to be part of the next fiscal year’s budget reconciliation process, but that is being reserved for tax reform. If the bill does pass the Senate, the House would also have to approve it during this timeframe.
A major sticking point for lawmakers has been the rushed process to vote on the bill. Without a full report from the Congressional Budget Office, lawmakers won’t know how much the bill will cost the government or how many people could potentially lose their coverage.
In order for the Senate to pass the GCHJ bill using the reconciliation process (meaning senators rely solely on the 52 Republican votes to pass given the united Democratic opposition to repealing the ACA), a vote must take place prior to the Sept. 30 government year-end. Since a vote has not yet been scheduled, it is unclear whether this bill can gain any traction. Also, several senators do not want to cast a vote without a CBO score; which is not expected until after the end of this month. Straight passage in the House is not guaranteed which means even if the GCHJ bill does pass the Senate, any House modifications to the bill would mean a re-vote in the Senate. Consequently, passage of the GCHJ bill is highly uncertain.
It does not appear the ACA taxes, the 3.8 percent NIIT and 0.9 percent additional Medicare tax are being repealed in this bill. However, with potential tax reform on the horizon, these taxes may be addressed as part of a larger tax overhaul. With that being said, these taxes are currently still in place for 2017 and should remain part of any year-end tax planning.
While insurers are still required by law to provide health insurance coverage to everyone, the GCHJ bill would allow states to use waivers to get rid of protections for people with pre-existing conditions and also obtain waivers to get rid of required coverage for essential health benefits, like maternity care, which could mean higher premiums for sick people.
Since insurance companies have already been preparing estimates for 2018 plans, the impact of the GCHJ bill has not been evaluated into the cost of employer-sponsored coverage. As a result, we recommend you maintain regular contact with your insurance agent/broker to monitor how this proposal could influence your renewals for next year’s insurance coverage.
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