H.R. 45

to repeal the Patient Protection and Affordable Care Act and health care-related provisions in the Health Care Education and Reconciliation Act of 2010

Date	May 16, 2013 (113th Congress, 1st Session)
Staff Contact	Kimberly Betz

On Thursday, May 16, 2013, the House will consider H.R. 45, a bill to repeal the Patient Protection and Affordable Care Act and health care-related provisions in the Health Care and Education Reconciliation Act of 2010, under a rule.  H.R. 45 was introduced by Representative Michelle Bachmann (R-MN) on January 3, 2013 and has 106 cosponsors. 

H.R. 45 repeals the Patient Protection and Affordable Care Act in its entirety.  In addition, H.R. 45 repeals title I and subtitle B of title II (health care-related provisions) of the Health Care and Education Reconciliation Act of 2010 (the health care-related provisions).  H.R. 45 restores the provisions of law in place prior to enactment of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010.

On March 23, 2010, the Democratic House and Senate passed, and the President signed into law, the Patient Protection and Affordable Care Act. The legislation passed by a vote of 219-212 (see Roll Call  #165).  Later on March 25, 2010, the Democratic House and Senate passed, and the President signed into law, H.R. 4872, the Health Care and Education Reconciliation Act of 2010, which passed by a vote of 220-207 (see Roll Call  #194).^[1]  Among other things, the law requires that most individuals obtain health insurance or pay a penalty tax; requires employers with 50 or more full time employees to provide approved health care coverage or pay a penalty tax; establishes insurance exchanges through which individuals and families will receive taxpayer-funded premium subsidies; expands Medicaid; cuts Medicare by $716 billion;^[2] imposes 21 additional taxes on health insurance plans, medical devices, businesses, families, and individuals at a cost of $1.1 trillion.^[3]  CBO’s February 2013 coverage estimate puts the total cost of coverage at $1.88 trillion up significantly from its initial 2010 estimate of $940 billion. 

Since the beginning of the 112^th Congress, the House has voted 36 times to repeal, defund, or dismantle in full or in part PPACA.^[4]  This includes two full repeal votes on January 19, 2011 and July 11, 2012, both of which passed by votes of 245-189 (see Roll Call #14) and 244-185 (see Roll Call #460), respectively.  The House voted to repeal PPACA on three additional occasions in the FY 2012, 2013 and 2014 Budget Resolutions.^[5]   As a result of these efforts, 7 different bills have been enacted that directly repeal or rescind funding from at least 8 different provisions of PPACA.^[6]

As the October 1, 2013 enrollment date and the January 1, 2014 implementation date approach, the evidence that PPACA will have significant consequences on patients, our nation’s healthcare system, taxpayers, job holders, job creators, individuals, families, and the economy continues to grow.  This week, three House Committees^[7] together released a compilation of their respective oversight activities highlighting the impact that the law is already having.  Among the many implications, the Committees highlighted the 190 million hours per year that American families will be forced to spend complying with PPACA’s requirements;^[8]  the likelihood that seven million people will lose their employer based insurance;^[9] the increase in health insurance premiums by as much as 400 percent for individuals and 100 percent for the small group market;^[10] the $716 billion cuts to Medicare; the $628 billion expansion of Medicaid to mostly childless adults, the 159 new government boards, including IPAB,^[11] and the 800,000 job losses that CBO anticipated.^[12]  House Republicans will continue to highlight the implications to jobs and access as well as the skyrocketing cost of health care.  Key implementation dates for 2013 and 2014 are as follows:

2013

Higher Costs and Taxes

• Limitation on flexible savings account contributions to  $2,500 per year (indexed to CPI)
• Imposition of a 0.9 percent Medicare Part A wage tax and a 3.8 percent tax on unearned, non-active business income for those earning over $200,000 or $250,000 for families (not indexed to inflation)
• Imposition of a 2.3 percent excise tax on medical devices
• Increase in the income threshold for claiming tax deductions for medical expenses from 7.5 percent to 10 percent
• Elimination of the existing deduction for employers who maintain prescription drug plans
• Cuts to Medicare payments to hospitals for treating low-income seniors
• Increase in Medicaid payment rates to primary care physicians for primary care services to 100 percent of the Medicare payment rate for 2013 and 2014
• Start of open enrollment in Health Insurance Marketplace October 1, 2013

2014

More Government, Higher Costs

• Implementation of Health Insurance Marketplace (Exchanges) – 17 states plus DC will implement their own exchanges, 7 in partnership with federal government, remaining 26 states will be run by the federal government – January 1, 2014
• Prohibition on annual limits or coverage restrictions on pre-existing conditions (guaranteed issue/renewability)
• Extension of prohibition on excessive waiting periods to existing health plans
• Imposition of modified community ratings: family versus individual; geography; 3:1 ratio for age and 1.5:1 for smoking
• Imposition of government-defined “essential benefits” and coverage levels on insurance plans
• Limitation on out-of-pocket cost sharing (tied to limits in HSAs). Limits are $6,250 for individuals and $12,700 for families (indexed for COLA)
• Implementation of premium subsidies for insurance purchased in the Health Insurance Marketplace -- amounts of subsidies are dependent on income and available up to 400 percent of the federal poverty line
• Requirement that federal government offer at least two multi-state plans in every state

Higher Taxes

• Imposition of new health insurance industry tax (increase will be $8 billion in 2014, $11.3 billion in 2015 and 2016, $13.9 billion in 2017, and $14.3 billion in 2018 and indexed to medical cost growth afterwards
• Imposition of individual mandate. Individuals who fail to obtain acceptable insurance will incur a penalty tax of the greater: $695 or 2.5 percent of income. For families without approved coverage, penalties are capped at $2,250 until 2016 and then indexed for inflation

Higher Costs/Lost Coverage/Lost Jobs/Employer Mandates

• Imposition of the Employer mandate. Employers with 50 full time employees or more who fail to offer “affordable” coverage must pay a $3,000 penalty for every low-income employee that receives a subsidy through the Exchange, even if coverage is already provided
• Imposition of $2,000 tax penalty on employers who employ more than 50 full time employees and don’t provide insurance coverage. Penalty assessed for every full time employee. Up to 30 full time employees are exempt when calculating penalty
• Require employers with more than 200 employees to auto-enroll employees in health coverage, with opt-out options

Decrease Access/Weakened Safety Net

• Continued cuts to Medicare home health reimbursement
• Implementation of IPAB recommendations
• Cuts to Medicare payments to Disproportionate Share Hospitals
• Cuts to federal Medicaid payments for Disproportionate Share Hospitals from $18.1 billion to $14.1 billion
• Expansion of Medicaid coverage to 22 million childless adults up to 138 percent of the federal poverty line – diminishing resources for vulnerable populations. States will receive 100 percent of the FMAP 2014-2016, 95 percent in 2017, 94 percent in 2018, and 90 percent after

A CBO estimate is not available at this time.^[1] However, last year, CBO provided an estimate for H.R. 6079, the Repeal of Obamacare Act.  According to CBO, “[a]ssuming that H.R. 6079 is enacted near the beginning of fiscal year 2013, CBO and JCT estimate that, on balance, the direct spending and revenue effects of enacting that legislation would cause a net increase in federal budget deficits of $109 billion over the 2013–2022 period. Specifically, we estimate that H.R. 6079 would reduce direct spending by $890 billion and reduce revenues by $1 trillion between 2013 and 2022, thus adding $109 billion to federal budget deficits over that period.”^[2]