On January 4, 2017 the House Republican Study Committee released a new plan for the repeal and replacement of the Affordable Care Act (ACA). The American Health Reform Act (AHRA) would fully repeal the ACA and health care-related provisions in the Health Care and Education Reconciliation Act, effective January 1, 2018. There is currently no timeline for the replacement portion of the legislation.
While The Better Way legislation proposes the use of tax credits, AHRA would convert “tax deductions for employer-sponsored health insurance and health insurance purchased by the self-employed into an above-the-line standard deduction for health insurance (SDHI).” Individuals with qualifying plans will receive a $7,500 SDHI while families would receive a $20,500 SDHI. The full value of the deduction is applied, regardless of the cost of the plan – incentivizing the choice of less expensive plans.