Screenplays, new business ventures and major legislation typically have problems in Act II.  Hopes were raised so high in Act I.  Now, things seem to drag on and on, pointlessly.   Friends tell you to give up or start over and enemies . . . well.

Last week, two House committees – Energy and Commerce, Ways and Means – produced the budget reconciliation bill drafts, sub nom the American Health Care Act – that were scheduled to have been delivered to the House Budget Committee by January 27.  The Budget Committee (remember, this is budget reconciliation) now will seek to deliver to the House floor an AHCA draft that can get 218 votes despite a feared CBO analysis that may be published today.  Here are highlights of the current bills.

Individual mandate taxes and employer mandate taxes are repealed, sort of.  Technically, the employer mandate tax (26 U.S.C. § 4980H) is set at $0 for tax years beginning after December 31, 2015.  Puzzlingly, however, ACA coverage reporting mandates and penalties are untouched.    So, if you were hoping to avoid dealing with the IRS about 2015 tax assessments, or Form 1095-C reporting issues, you’ll need Budget Committee or House floor amendments.  And, while the individual mandate dies, the AHCA authorizes insurers to charge a 30% premium for people who want to buy coverage after they become ill or injured.  That’s the trade-off for keeping the ACA mandate to sell coverage to people with pre-existing conditions.

Medicaid expansion, which the ACA promised to fund only to 2019, is repealed after 2019.  Further, states will be paid a capped amount per individual enrolled in Medicaid.  However, the AHCA restores DSH payments that hospitals lost under the ACA and gives states much more authority to police Medicaid eligibility and ferret-out fraud.

ACA premium and cost sharing subsidies are repealed and replaced with tax credits based on age and family size.

Almost all the ACA’s new taxes are repealed, along with the ACA’s FSA limits.  The big exception is the Cadillac Plan tax, which gets buried and then rises from the grave, zombie-like, in 2025.

We don’t plan to get too excited about anything until we see (a) what the House sends the Senate and (b) what HHS Secretary Tom Price does to reform, by administrative rule and sub-regulatory guidance, what cannot be changed by budget reconciliation legislation.  For example, in a March 10 news release, the Secretary promised to do, “everything within our authority to provide our nation’s governors and state legislatures with greater flexibility on how they utilize Medicaid resources in caring for those in need.  This will include a review of existing waiver procedures to provide states the impetus and freedom to innovate and test new ideas to improve access to care and health outcomes.”  We suspect that new HHS rules (and, later, IRS and DOL rules) will become bargaining chips in negotiations over legislation that will need 60 Senate votes.

We’re in the middle Act.  It’s messy and we’ll need a while to see where we’re going.  As Quasimodo would have said, “The bills . . . the bills!”

Update:  On March 16, 2017, the House Budget Committee approved (19-17) the AHCA without amendment.