The MacArthur Amendment: Can it move health care reform forward?

On April 25 Republicans, led by Congressman Tom MacArthur of New Jersey, released the MacArthur Amendment, seeking to repeal language from the American Health Care Act (AHCA) and bridge the divide between the conservative and moderate wings of the Republican Party.

Following a failed vote on the AHCA at the end of March, Republicans have struggled to agree on how to move health care reform forward. The party has been deadlocked with pressure from Conservatives, but this latest proposal is a glimmer of hope for potential progress.

At a high level, the MacArthur Amendment would repeal language from the AHCA that would allow states to define essential health benefits for purposes of determining premium tax credits, and would instead allow states to apply for waivers that “encourage fair health insurance premiums.”

The amendment includes three types of waivers:

  1. The age rating ratio adjustments waiver, which would allow states to adjust the 3:1 age rating ratio established in the Affordable Care Act (ACA). States could apply for this waiver and implement their own age rating ratios beginning on Jan. 1, 2018.
  1. The essentials health benefits (EHB) waiver, which would enable states to define their own essential EHB package including annual, lifetime, and out-of-pocket maximum limits. This waiver would allow states to act for plans beginning on Jan. 1, 2020.
  1. The health status underwriting waiver, which would enable states to actively underwrite based on the health status of an individual, if they had a 63-day or greater gap in coverage. This would replace the 30 percent premium penalty that was originally proposed in the AHCA. The underwriting effect would only last for the plan year in which the individual enrolled.

To obtain a health status underwriting waiver, the state would need to operate a program under the AHCA’s patient and state stability fund to:

  • Offer financial assistance to help high-risk individuals get coverage in the individual market
  • “Provide incentives to appropriate entities to enter into arrangements with the state to help stabilize premiums” in the individual market (a reinsurance program)
  • Or participate in the recently added federal invisible high-risk sharing program, which also essentially reinsures high cost cases.

Health status underwriting by states would begin in 2019.  

All waivers would automatically be approved by the Department of Health and Human Services (HHS) unless the state was notified within 60 days of their application submission. Waiver applications must describe how the waiver would reduce average premiums for health insurance coverage in the state, increase insurance enrollment, stabilize the market for insurance coverage, stabilize premiums for people with preexisting coverage, or increase the choice of health plans in the state.

Can this amendment draw the votes required for the AHCA to pass a House vote? It’s still unclear if and when a vote will take place. Even so, there’s a long road to hoe before the Republican vision of health care reform would come to fruition. We’ll continue to track the progress of the health care reform movement and update as events unfold.