The American Health Care Act, the proposed replacement bill for the Affordable Care Act, was recently released. Here are the ins and outs of what the proposed changes include and don’t include:
- Pre-existing condition coverage.
- Continuous coverage—consumers must pay a 30 percent penalty on future insurance premiums if they don’t maintain continuous coverage.
- States can’t expand Medicaid after 2019. They’ll continue to get higher federal dollars for current enrollees until then, as long as those enrollees don’t drop coverage.
- Medicaid will then change to “per capita caps” (where the federal government gives a lower amount of money per enrollee to the state) in fiscal year 2020.
- A new, refundable tax credit will be available in 2020 to help people buy health insurance—starts at $2,000/year for people in their 20s, increases to $4,000 for people in their 60s. It’s not means tested, but incrementally lowered for upper-income people (starting at $75,000 for individuals, $150,000 for families).
- Insurers can charge older customers five times as much as young adults.
- Special fund states can apply to set up “high-risk” pools, fix their insurance markets, or help low-income patients.
- All Obamacare taxes, including the “Cadillac tax” (until 2025).
- All Obamacare subsidies, including its premium tax credit, beginning in 2020.
- Individual and employer mandate penalties.
- No longer will limit the tax break for employer-sponsored health coverage.
- No payments to insurers for cost-sharing reductions.
This is a starting point for the health care reform debate and is unlikely to be the final version of Republicans’ health care reform legislation. Changes will likely have to be made for House Speaker Paul Ryan to secure enough votes for passage in the House, and the Senate will have its own ideas on the legislation.