H.R. 2668: Fairness for American Families Act

H.R. 2668

Fairness for American Families Act

Sponsor
Rep. Todd Young

Date
July 17, 2013 (113th Congress, 1st Session)

Staff Contact
Kimberly Betz

Floor Situation

On July 17, 2013, the House will consider H.R. 2668, the Fairness for American Families Act. H.R. 2668 was introduced on July 11, 2013 by Representative Todd Young (R-IN) and has 23 cosponsors.

Bill Summary

H.R. 2668 delays for one year the requirement that individuals purchase approved health coverage as set forth in Section 1501(b) of the Patient Protection and Affordable Care Act.

Background

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 in the amount of $95 for 2014, $325 for 2015, and $695 for 2015 and beyond.[2]  Individuals are expected to purchase healthcare coverage either through insurance exchanges through which individuals and families will receive taxpayer-funded premium subsidies, Medicaid, or employer sponsored coverage.[3]

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. On July 2, 2013, the Department of Treasury announced that it would delay the employer reporting requirements for an additional year.[4]  On July 5, 2013, the Department of Health and Human Services issued a 606-page draft final rule in which it delayed the requirement that exchanges verify the employer-insurance status of applicants for one year and required exchanges to employ only random sampling – not comprehensive sampling– of income eligibility as it relates to premium subsidies.[5]

Among the many additional implications that Congress has highlighted, the Ways and Means, Education and Workforce, and Energy and Commerce Committees have identified the following: the190 million hours per year that American families will be forced to spend complying with PPACA’s requirements;[6]  the likelihood that seven million people will lose their employer based insurance;[7] the increase in health insurance premiums by as much as 400 percent for individuals and 100 percent for the small group market;[8] the $716 billion cuts to Medicare; the $628 billion expansion of Medicaid to mostly childless adults, the 159 new government boards, including IPAB,[9] and the 800,000 job losses that CBO anticipated.[10]

Key Points and Dates on Healthcare:

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

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

Cost

CBO has not yet produced an estimate. However, in a letter to Chairman Camp, CBO indicates on a preliminary basis that enacting H.R. 2668 would have the effect of reducing the deficit in 2014 and over the 2014-2023.

Additional Information

For questions or further information contact the GOP Conference at 5-5107.