We have a new blueprint for health coverage in America. And with its new answers come new questions. After reading the House GOP legislation, here are some of the most important changes and unknowns.
What’s it called?
The bill is called the American Health Care Act. So AHCA. It is 123 pages, and you can download it here.
What does it do?
It’s not a full repeal of the Affordable Care Act (ACA), or Obamacare. Rather, it repeals some parts and keeps others.
- It would enact a sweeping reform of Medicaid, which provides health care for low-income, disabled and other resource-strapped Americans.
- It also changes some important policies for health insurers, allowing them to charge more based on age and also to charge a penalty for lapsed coverage. (See below for more details on this).
- Taxes: Republicans would repeal all taxes in the ACA. That includes a tax on medical devices and a 3.8 percent surtax on investment and other income of families earning over $250,000 a year.
- Subsidies: It would end the ACA’s form of subsidies for low and middle-income families.
- Mandate penalties: The bill would also repeal the penalties associated with the individual and employer mandates. (It adds a new coverage penalty — see below).
- Medicaid expansion: The legislation would trigger a delayed repeal of the Medicaid expansion program — sunsetting it after 2020. The expansion provided Medicaid to so-called “able-bodied adults” earning under 138 percent of the poverty line. Those in the expansion plan before 2020 can keep their Medicaid coverage as long as they qualify.
- Types of plans: Finally, the bill would end the requirement that insurers offer plans with certain amounts of coverage. In other words, the “bronze, silver and gold” plans could go away at insurer’s discretion.
What is kept?
- Exchanges: The Obamacare exchanges can remain. Republicans allow states to keep those in place.
- Pre-existing conditions: In addition, the ACA’s protection for those with pre-existing conditions remains. Insurers cannot drop those individuals.
- Under age 26: Similarly, parents can continue to keep children on their health insurance until age 26.
- Mandates: The individual and employer mandates technically remain, for now. This bill only zeroes out the penalties. The requirements for health insurance may be repealed in future legislation, but not this bill.
What is new?
- Medicaid shift: The bill goes beyond the ACA to make sweeping changes in Medicaid. It would end the current pay-for-all-services program and transform Medicaid so that it pays a set amount per person. It would give states more flexibility for how to use that money, but it is not yet clear if that will lead to dramatic overall funding cuts.
- New age-based rates: This proposal boosts the amount insurers can charge older Americans. The ACA allows insurers to charge an older person no more than three times more than a younger person. Republicans increase that to five times more.
- Lapsed coverage penalty: Republicans would allow insurers to charge an extra 30 percent for those who go without insurance for more than 63 days.
- Tax credits: The ACHA would offer a new set of tax credits to help lower and middle-income Americans buy health coverage. The full credit goes to those earning under $75,000 as an individual or $150,000 as a family. It increases by age so that those under 30 would get $2,000 a year, and slides up so those over 60 would receive $4,000.
- HSA: The GOP bill makes it easier and allows for larger savings into Health Savings Accounts.
- Funding for states: The plan also offers $100 billion over ten years for states to use essentially as they see best to reach populations with health coverage problems.
- Planned Parenthood funding cut: The bill would cut funding to Planned Parenthood and all health operations that offer abortion services.
What still needs answers?
- How many people would be uninsured under this plan?
- How much will it cost, particularly the tax credits?
- Where does the funding come from to balance those costs? (Republicans say they got some help by delaying tax repeals a year, but many suspect large amounts of savings may be from the changes to Medicaid.)
Correction: A previous version of this article said insurers would not have to provide certain coverage, including no-cost preventative care. It’s been updated to reflect that such plans could go away at the insurer’s discretion.