United States

Republican health care reform efforts blocked in the Senate


On July 28, 2017, the Senate voted against a Republican health care bill known as the Health Care Freedom Act. The Health Care Freedom Act was the Republican’s latest draft of legislation to modify the Affordable Care Act (ACA). 

The Affordable Care Act, commonly called Obamacare, has been the law of the land since 2010. The ACA expanded health coverage to more Americans by broadening Medicaid and establishing health insurance exchanges where certain individuals could buy health coverage with federal subsidies. The ACA also imposed new federal requirements regarding eligibility and benefits on health care plans obtained by individuals and businesses. Several new taxes were added by the ACA including a tax on individuals who do not buy health insurance and a tax on businesses with at least 50 full-time employees that choose not to offer health coverage to their employees.

Since the November 2016 elections, the Republicans in Congress have been working on health care reform legislation that would repeal, replace or modify the Affordable Care Act. On May 4, 2017, the House of Representatives passed the American Health Care Act (AHCA) as its version of health care reform. The AHCA reduced funding for Medicaid and health insurance exchange coverage, plus eliminated certain ACA taxes. The Senate then issued, and subsequently amended, its health care reform bill called the Better Care Reconciliation Act, but this bill was defeated in the Senate via a vote on July 25, 2017. The Senate considered and rejected other health care reform legislation on July 26th before voting down the Health Care Freedom Act on July 27, 2017.

At present, the Republican’s health care reform efforts are stymied and have an uncertain future. Therefore, for now, the ACA remains unchanged and is still the law of the land. Individuals and businesses should continue to comply with the ACA to avoid potential tax penalties for noncompliance.

Jill Harris

Senior Director

Jill helps businesses with planning and compliance for employee welfare and retirement plans. She can be reached at jill.harris@rsmus.com.

Areas of focus: Washington National TaxAffordable Care Act