House Republicans released their plan in March to repeal and replace the Patient Protection and Affordable Care Act (PPACA) also known as Obamacare. The original bill got through the required committees but failed to gain enough support to be brought to the floor for a vote.
GOP leadership spent weeks working with conservatives and moderates to reconcile differences and create the bill that passed the U.S. House of Representatives Thursday.
Things will likely change once the Senate creates their version of the bill so take everything here with a grain of salt.
Titled The American Health Care Act (AHCA) as it is today, can be seen in its entirety HERE, but because ACA was a series of amendments to other law, understanding these new changes would require applying these proposed amendments to The Social Security Act, Internal Revenue Code of 1986, and The Public Health Service Act. Because that’s as fun to get through as the “terms of service agreements” for smartphone apps, I’ll distil it down to the basics.
Taxes, Fees, and Subsidies
Basically, the GOP plan will rescind all Obamacare taxes, fees and subsidies and enact a new entitlement in the form of a tax credit for low and middle-income families of between $2,000 and $14,000 per year.
The premium subsidies are now a system of tax credits. The credits would rise with customers’ ages and, like the subsidies, could be used toward premium costs.
There is additionally a subsidy, the Patient and State Stability Fund (Title XXII), funded by federal taxpayers and given as a block grant to states who get approved, so that states may help “through the provision of financial assistance, high-risk individuals who do not have access to health insurance coverage offered through an employer enroll in health insurance coverage in the individual market in the State.”
This federal-to-state grant may be used by states to stabilize premiums, reduce the cost-of-care for patients who have a “high rate of utilization of health services,” promote participation in the health care market, preventative services, payments to providers, and the subsidization of out-of-pocket costs.
The 20% tax increase on Health Savings Accounts (HSAs) and Medical Savings Accounts (MSAs) is rescinded. The HSA tax will return to 10% and the Archer MSA tax to 15%.
The Stability Fund will be allotted $15 billion in 2018 and 2019 but will drop to $10 billion in 2020 and beyond.
The GOP plan will dismantle taxes on tanning facilities, prescription drugs, over-the-counter medications, health-insurance premiums, medical devices and higher earning individuals.
Penalties
The new plan will immediately remove the Obamacare penalty (individual mandate) that Americans were forced to pay if they did not have Obamacare-approved insurance during the previous year.
AHCA has a provision that intends to prevent the acquisition of insurance when it’s needed and dropping coverage after the medical event is over. This gaming of the health insurance markets makes it impossible to control costs and results in higher premiums for those that keep coverage year-round.
The provision, named “Encouraging Continuous Health Care Coverage,” describes a 30% increase in premium cost for a covered person who did not have coverage for a continuous 63-day period during the last plan year.
Pre-existing Conditions
The republican bill will make it illegal for insurers to deny coverage, increase premiums, or put a lifetime cap on patients with pre-existing conditions as long as they maintain coverage.
The Stability Fund provides money to the states to deal with expenses associated with high-risk patients. Changes in the passed version add an additional $8 billion to the fund.
The bill allows insurers to charge up to 5x more for people with pre-existing than otherwise healthy persons. Money from the stability fund can be used to ease the burden.
Abortion
Any plan that provides coverage for abortions, other than when necessary to save the life of the mother or pregnancies resulting from rape or incest, will not be considered eligible health insurance for the purpose of subsidies and premium penalty calculation.
AHCA also blocks federal payments to Planned Parenthood for a year.
Medicaid
The expansion of Medicaid under Obamacare will be rolled back and tuned ultimately ending in 2020. Calling it the “modernization of Medicaid,” House Speaker Paul Ryan said that “By modernizing and strengthening the program, our reforms will empower states to create plans to best meet the specific needs of their citizens. It will put Medicaid on It will put Medicaid on financial footing so it can do what it was designed to—protect the most vulnerable.”
Waivers to the states
Individual states may now get waivers allowing states to charge older custromers higher premiums than younger ones with no restrictions.
Waivers will also be available to allow states to opt out of the “essential benefits” coverage which required even young, single men to have maternity coverage in their plans.
A waiver can be obtained to allow health insurers to charge higher premiums for those with pre-existing conditions, but only if their coverage lapses for 63 days consecutively. This waiver requires that the state set up high-risk pools to help defray the costs of the higher premiums and will be partially funded by the stabilization fund.
The So-What of it all…
The GOP bill is replacing entitlements with other entitlements. While the ACA subsidy and Medicaid expansion are slated to go away in the future, a new tax credit and a state grant will arise before those others are gone.
As a tax credit, anyone that does not owe taxes will receive a tax refund even after having paid zero into the system.
AHCA does return a great deal of power to the states on how they will distribute the funds, but the states will have to submit a health care program to the federal government in order to receive the grant.
With pre-existing conditions being covered without the ability of insurers to charge more for covering the risk, an imbalance is obvious. The Stability Fund may help with some of that, but the increased costs will likely end up largely covered through taxpayer-funded subsidies or higher insurance premiums.
The ultra-long timeline for reversing the Medicaid expansion is of concern. January 2020 is the current expiration date which is an obviously political choice – after the 2020 presidential and congressional elections. With a date that far in the future and obvious self-preservation a motivation, it is unlikely that the ending of Medicaid expansion will ever occur.
If the Medicaid expansion is never reigned-in, will the new tax credits and Stability Fund subsidies also get shut down? Don’t bet on it.
Where in this new AHA is a tax break for the wealthy?
The legalese is abysmal. What makes lawmakers write in this archaic manner?
I know. They don’t want us to really understand what kind of crap they are creating.
What a travesty!
The “tax break for the wealthy” that the left is shrieking about is actually the termination of a ‘transfer of wealth’ tax instituted in Obamacare. Earners making more than $200,000 per year under Obamacare taxation paid a .9% extra income tax + 3.8% additional on certain investments. Those taxes, as are all Obamacare taxes, are removed by the AHCA at one point or another.
The sham being that 1%’ers also most likely pay the Obamacare mandate penalty as they only carry catastrophic care insurance – if any at all – which doesn’t qualify as ‘covered.’
The wealthy were being double-taxed for coverage they didn’t want and never use.
What about the additional payment for Medicare for those that are receiving Medicare coverage?
Was this part of Obamacare?
The Cadillac tax?
The ‘Cadillac Tax’ isn’t specifically mentioned in AHCA so it appears to remain in place at least for phase one of the GOP plan.
I am not familiar with the “additional payment for Medicare” you mentioned. I’ll do some digging. I certainly saw no mention of medicare payments in the AHCA bill.
Rich;I wrote an article on a some research I did and will post it along with links.I don’t like th e older people paying five times as much as younger people.I thought the younger people should pay more since they don’t get as sick as much. Turning medicaid over to the states isn’t a good idea since the poorer states may not be able to afford it.This plan looks like Obamacare light. like the fact that the Obamacare taxers are removed,but they should have made it public first before voting on it.
Amended texts are presented with the individual amendments – as here – and as a consolidated version, integrating the amendments into a continuous, readable, text. That is how lawmakers proceed.
Where is the consolidated version? I have not been able to locate it, which surprises me: publishing the individual amendments only doesn’t sufficiently inform people on what is actually amended. As you say yourself, individual amendments make the text very, very difficult to read for people who aren’t specialised in the matter. To understand what the amendments entail, one has to carefully consult every single original measure being amended, which is very cumbersome: few people have the time to do that. So where is the consolidated version?
My prediction. The current Trump health care bill is going to die….period. OBAMACARE continues to self destruct….as it was designed to do.The deep state wants single payer,government run, health care.That is what OBAMACARE was designed to lead to.
The question is what will be the answer from the deep state when OBAMACARE self destructs as was planned. I’m sure many in both political parties(they are just two personas of the same entity) will push for going straight to government controlled single payer health care.What will President TRUMP do….is the question.
My prediction…nothing happens till after the 2018 elections…and perhaps not till after the 2020 elections…if at all.
The deep state interests have invested billions in getting to a single payer system and they won’t give up on their investment easily.
Agreed only two things that I see that are bad is pre existing coverage is still needed which the new health bill covers and obozo tax needs dropped which new heathcare bill also takes care of.
I think it’s great when people are not only paying attention, but asking questions. I do believe that Bert Nemcik has a point! The complexity of this (or most any) bill certainly makes it difficult to understand and able to form an opinion on.
Obamacare was designed to ultimately lead to a socialist single payer plan similar to Canada, U.K. etc. I am of the opinion that the Insurance Companies, along with us, got the ‘shaft’ and they were deliberately mislead and intended to fail…until only the government was left. Admittedly, I’ve been wrong before.
We need to direct our questions to the legislators as well as each other…After all, we’re pretty much in the same choir……I would add the question… “WHY in seven years they didn’t have at least a concise ‘outline’ of a plan ready to go day one (if) they were sincere about repealing Obamacare”
BEFORE we damn the House proposals or applaud them, let’s remember that before the President see it, it will bounce back and forth between the Chambers and in the end will likely be only a shell of this first submission….This is the time to stack the mail boxes and jam the phone lines with what we want. And ever be mindful that “YOU CAN PLEASE ALL OF THE PEOPLE ‘SOME’ OF THE TIME, BUT YOU CAN’T PLEASE ALL OF THE PEOPLE ‘ALL’ OF THE TIME”. There’s a “whole bunch of us out here and we all have an opinion of what ‘we’ want….The more noise you make with legislators, the more likely you’ll get something you like or at least live with.
There are reportedly 11 Muslims and at least one declared Socialist in Congress. Tell them…”THIS IS MY COUNTRY, ONE THAT I LOVE”….and you CAN’T have her !!!!
This is NOT your country . It is OUR country, i.e. a country for all of he people, regardless of religion, race or political affiliation!!!!
If the Muslims keep getting everything they want. It will not be my or our country it will be theirs and you will die for not agreeing with their fake Muhamed religion.. Restaurants are stopping selling bacon because it offends them. We can’t have freedom of religion to be Christians Because it offends them. Women can’t have uncovered faces or have a job or an opinion, because it offends them. Wake up!!!!!
I don’t know what country you live in but if its that bad where you live you better get out. The muslims in my country are very different than the muslims in you country and the only thing that has changed is haters like you are around!!!!
John…”This is My Country” is a song tittle” ..Quite patriotic declaration of love, loyalty etc….also noticed if that’s your July 30 reply to Brian that you, too, use “MY” Country. We ALL have ownership.
As an RN, I have seen and heard how Obamacare is ruining lives and putting people’s health in jeopardy. Besides the fact that many co-ops have already dropped out, leaving some states with only one insurer. Now Blue Cross has threatened to drop out as they too say they are losing money on the exchanges. If nothing is done, the ACA was going to die anyway. And for all those who say the republicans did nothing to try to fix Obamacare; every-time they proposed fixes, then senate majority leader Harry Reis made sure it never got to the floor.