Comparison of the ACA and the Republican Common Sense Healthcare Reform Act

• Creates state-based Health Insurance Exchanges, administered by a governmental agency or non-profit organization, through which individuals and small businesses with up to 100 employees can purchase qualified coverage. Permit states to allow businesses with more than 100 employees to purchase coverage in the Exchange beginning in 2017. States may form regional Exchanges or allow more than one Exchange to operate in a state as long as each Exchange serves a distinct geographic area.

• Allow small businesses to pool together through Association Health Plans (AHPs) to leverage lower cost health insurance on behalf of their employees. By creating larger insurance pools for small businesses, these provisions will make health insurance more affordable and more accessible. CBO believes this provision will result reduce the number of uninsured by hundreds of thousands.
• In addition, the CSHRA bill allows for the interstate purchase of health insurance. This would allow health plan purchases greater choice in health care plan options. There are pros and cons to that, however that I will refrain from debating here.

• The ACA provides small employers with no more than 25 employees and average annual wages of less than $50,000 that purchase health insurance for employees with a tax credit. – Phase I: For tax years 2010 through 2013, provide a tax credit of up to 35% of the employer’s contribution toward the employee’s health insurance premium if the employer contributes at least 50% of the total premium cost or 50% of a benchmark premium. The full credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000. The credit phases-out as firm size and average wage increases. – Phase II: For tax years 2014 and later, for eligible small businesses that purchase coverage throughthe state Exchange, provide a tax credit of up to 50% of the employer’s contribution toward theemployee’s health insurance premium if the employer contributes at least 50% of the total premiumcost. The credit will be available for two years. The full credit will be available to employers with 10 orfewer employees and average annual wages of less than $25,000. The credit phases-out as firm sizeand average wage increases.
• The ACA, in contrast, imposes tax penalties on employers with more than 50 employees that do not offer coverage and have at least one fulltime employee who receives a premium tax credit. In those cases the employer must pay a fee of $2,000 per full-time employee, excluding the first 30 employees from the assessment. Those employers will pay the lesser of $3,000 for each employee receiving a premium credit or $2,000 for each full-time employee effective 1/1/2014.

• The CSHRA says nothing about tax credits for businesses in purchasing health insurance. There is much less detail in the 220 page CSHRA bill than in the 2,000 page ACA bill.

Summary and Invitation to Review:

As Congress debates this controversial bill and considers the repeal and replacement of the health care legislation, I invite your review of this summary. While actual repeal and replacement is very unlikely, this debate could not be more important as the nation continues to struggle with the concept of health care reform. My intent is to cut through the posturing and provide a truly informative comparison of the parties' bills that has been sorely lacking to this point. I hope you have found this useful and informative and look forward to your reviews.

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