I Was Right About the AHCA’s Impact on Veterans, Republicans Just Proved It

Throughout the debate over the American Health Care Act and after it passed the House, I repeatedly warned my Republican colleagues that their bill would open a loophole jeopardizing access to health care tax credits for as many as 7 million veterans.

I explained the loophole in a committee hearing, I raised it in media interviews, I asked the Congressional Budget Office to evaluate it, and I highlighted it on the House Floor. Each time, I was told by the bill’s authors and supporters that the loophole I found did not actually exist. Now, more than a month after voting to pass the bill, Republican leadership is acknowledging the loophole exists and today we are voting to fix it.

The story of how the loophole was created, why the AHCA was passed before it was fixed, and why it took so long for Republican leadership to publicly acknowledge the problem, is a lesson in the inherent danger of rushing to pass a bill that transforms nearly one-fifth of the American economy and determines the quality of care that all Americans receive.

The original American Health Care Act — before it was frantically dressed up with amendments and jammed through the House — got nearly everything wrong about health care policy except for the one thing it got right.

On page 97, line 21, the original AHCA created a “Special Rule with Respect to Veterans Health Programs.” While the bill denied access to AHCA’s tax credits for anyone eligible for government-sponsored health care (including Medicare, Medicaid, or care through the VA), this rule made veterans the exception. They could receive tax credits even if they were eligible for VA care, as long as they were not enrolled at the VA.

Page 97 — Line 21 of the American Health Care Act, as originally introduced on March 20, 2017

Despite common perceptions, many veterans receive care outside the Veterans Health Administration. This happens for several different reasons: They may have private doctor they are comfortable with, their closest VA facility may be too far or too full to meet their needs, or their VA priority rating may only entitle them to limited medical services at the VA.

Roughly 7 million veterans are eligible but not enrolled in VA care and that one sentence on page 97 of the original AHCA protected their access to the law’s tax credits.[1, pg 172]

The initial Congressional Budget Office analysis estimated that 24 million Americans would lose access to affordable insurance through the AHCA, but at least these veterans were spared, I thought. Then came the amendments.

Part II: The Amendments

On March 22, Ways and Means Committee Chairman Kevin Brady and Energy and Commerce Chairman Greg Walden introduced a series of changes that were billed as “technical fixes” to the AHCA. One of them completely removed and replaced pages 88–119 of the original AHCA. The special rule for veterans (on page 97) was gone and nothing in the new language appeared to replace it.

The Brady-Walden Manager’s Amendment, page 6, cuts pages 88–119 of the AHCA, including the special rule for veterans

I represent a community where many veterans live, I’m the Vice Ranking Member of the House Veterans’ Affairs Committee, and I’m the nephew of a Vietnam veteran and the great nephew of three men who served in the legendary 442nd Regimental Combat Team in World War II. I was determined to find out what happened to the special rule protecting veterans in the AHCA.

That night I went to the House Rules Committee to explain my concern. This was when I first came to understand two things. One, the removal of the special veterans rule from the AHCA was not an accident. Two, my Republican colleagues did not understand or were not willing to admit the impact it could have.

Video of the my testimony at the House Rules Committee, March 22, 2017

On the first point: The Republicans’ legislative strategy is to pass the AHCA without input or votes from Democrats. Budget reconciliation makes it possible for a budget bill to pass the Senate with just a simple majority, instead of the 6o votes needed to avoid a filibuster, which would require support from at least eight Senate Democrats.

But to get through the Senate under the reconciliation process it must pass a series of tests, known as the Byrd Rule. (More about that here.) One test is whether the bill includes any provisions outside the jurisdiction of the committees that submitted the bill. A special rule for veterans would clearly fall under the jurisdiction of the Senate Veterans Committee, which is not among the committees submitting the bill, thus failing the test and triggering the Byrd rule. In short, including the special rule for veterans would prevent the AHCA from passing under reconciliation.

The rules of reconciliation prohibit provisions that fall outside the jurisdiction of the committees submitting the bill.

On the second point: There was honest confusion about whether existing regulations might protect veterans if the special rule was not included. Congressman Doug Collins, a Republican from Georgia and a veteran himself, vehemently argued in the Rules Committee hearing I attended that removing the special rule for veterans would change nothing. In the video of the hearing you can hear him make reference to an existing regulation that would protect veterans’ tax credits, even if the protection was not written into law.

But the existing regulation Mr. Collins is referring to was written to interpret and implement the Affordable Care Act, which the AHCA would repeal. Once the Republican health law was passed the ACA would disappear and the regulation protecting up to 7 million veterans would disappear with it.

It needed to be written into the new law. Four days later the AHCA was pulled from the Floor prior to a scheduled vote due to lack of support. The bill appeared dead and the loophole appeared inconsequential.

Part III: New Amendment, Same Problem

A month later, Rep. Tom MacArthur revived the AHCA with an amendment that allowed states to seek a waiver for requirements of the Affordable Care Act, including the “essential health benefits” provision and protections for people with pre-existing conditions. With most of April to address the veterans’ tax credit issue, I assumed the bill’s authors would have found an artful fix. But, to my great surprise, when the text of the amendment was released on April 26, there was no fix to be found.

When the bill came to the House Floor 10 days later, I joined Minority Leader Nancy Pelosi and Ranking Member Tim Walz, the top Democrat on the House Veterans’ Affairs Committee and the highest ranking enlisted soldier ever to serve in Congress, to reiterate our concerns with how the AHCA would affect veterans.

My speech during the Floor debate over the American Health Care Act, May 4, 2017.

Again, my Republican colleagues dismissed our claims and cited the regulations issued for the ACA, which they would vote to repeal later that day. Dr. Phil Roe, Chairman of the House Veterans’ Affairs Committee said: “No matter what verbiage you hear, nothing in this bill changes how veterans are treated under the law — nothing. The criticisms are flat-out wrong.”

I have worked with Dr. Roe frequently on the veterans issues and, while we differ on policy, his commitment to veterans is beyond reproach. But on this issue I believe he and his colleagues were mistaken. Now it looks as though my Republican colleagues agree.

Part IV: A Simple Fix Reveals a Bigger Problem

This afternoon Republicans will bring to the Floor a bill that would close the loophole by specifically mandating AHCA tax credits are available to the 7 million veterans eligible but not enrolled in the VA. After spending several weeks denying the loophole’s existence — in public hearings, floor debates, and in the press — they have decided to fix it.

Here’s what I took away from this experience : The authors of the American Health Care Act — and many Members who voted for it — did not understand the impact it could have on veterans.

If Congress had taken more time, they would have found that the tax credit loophole is just a small part of the damage the AHCA would inflict on the veterans community. Under the Affordable Care Act, the uninsured rate among veterans dropped by 40% between 2013–2015. Much of that drop is due to Medicaid expansion. In fact, the uninsured rates among veterans averaged 4.8% in expansion states compared to 7.1% in non-expansion states in 2015.[2]

One in 10 veterans rely on Medicaid.

The same goes for the waiver that states can seek if they don’t wish to protect the 10 “essential health benefits” required in the Affordable Care Act. One of the 10 is “mental health and substance use disorder services including behavioral health treatment,” which is critical for veterans suffering from the invisible wounds of war. What would happen for veterans living in states that choose not to offer require coverage for mental health services?

Under AHCA, states would also have the option of waiving protections for people with pre-existing conditions. Would insurance companies be permitted to deny coverage to a veteran based on injuries suffered in combat? And if so, what good are tax credits if veterans can’t use them to get the coverage they need?

These are the questions that should have been answered before a single vote was taken on the American Health Care Act.

Part V: What Else Don’t They Know?

Protecting veterans health care is a poignant and important issue because veterans have unique health care needs and deserve to have those needs met — but the changes to veterans’ care are just a sliver of the overall impact the AHCA would have on the American health care system.

The confusion regarding the consequences of the bill, the quick dismissal of honest concerns, and the general haphazardness that defines the AHCA’s treatment of veterans is almost inevitably repeated throughout other parts of the law.

Some of the worst parts of the AHCA are out in the open for all to see, for example, the huge cuts to Medicaid that are funded by even bigger tax cuts for wealthy Americans. But many of the AHCA’s more subtle consequences, the ones that will affect the everyday lives of middle-class Americans, are not well understood.

My greatest concern is not that House Republicans are hiding what they know about the impact of the AHCA. My worry is that they don’t honestly know what it will do or who it will hurt. And they voted for it anyway.



Representing CA's 41st District — The Inland Empire — Chairman of the House Committee on Veterans’ Affairs and Member of House Ed & Labor Committee.

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Mark Takano

Representing CA's 41st District — The Inland Empire — Chairman of the House Committee on Veterans’ Affairs and Member of House Ed & Labor Committee.