House Republicans took another step Thursday in their quest to repeal and replace Obamacare, passing a bill that would allow American Health Care Act tax credits to go toward COBRA plans.
COBRA plans allow people who have left a job to purchase the same health insurance they had when working for that employer for up to 18 months.
The U.S. House of Representatives bill, called the Broader Choices for Americans Act, is part of what Republicans call Phase 3 in a strategy to repeal and replace Obamacare. Phase 1 was the American Health Care Act, the bill that would change how Medicaid is funded by the federal government, change subsidies for the individual market and allow states broader authority to evade Obamacare regulations on the individual market.
Phase 2 is rulemaking expected from HHS. And Phase 3 is approaches to healthcare reform that could not be included in the AHCA because that bill must reduce federal spending to qualify for a Senate process that allows that body to avoid a filibuster.
The Broader Choices for Americans Act passed by a 267-144 vote Thursday.
"Healthcare reform doesn't stop with the American Health Care Act, and these bills will make our system fairer, better and cheaper," House Majority Leader Kevin McCarthy said.
The House also passed a bill Thursday that clarified that veterans who are eligible for VA coverage, but do not enroll, may use subsidies to buy plans in the individual marketplace.
COBRA plans are generally more expensive than individual marketplace plans, and the former employee is usually paying the entire cost of the coverage, plus a 2% administrative fee. COBRA plan holders will not have access to the proposed subsidies if their former employer is still paying its share of the premium.
A few select groups currently can get help paying for COBRA through the tax code—those who were displaced by foreign trade and have applied for help through the Trade Adjustment Assistance program, and those whose former employers' pensions went bankrupt and were taken over by the Pension Benefit Guaranty Corp.
The Broader Choices for Americans Act would take effect in 2020 if Congress passes the American Health Care Act.