dkfielding/iStock/Thinkstock(WASHINGTON) — The House voted today 217-213 in favor of the American Health Care Act. How does the Republican health care plan differ from Obamacare?
Here is a breakdown of the AHCA:
In brief: What the AHCA does
• Ends individual mandate, imposes surcharge for coverage lapse
• Ends Obamacare premium subsidies, offers tax credits instead
• Rolls back Medicaid expansion across 30 states
• Allows states to impose Medicaid work requirement
• Expands health savings accounts
• Allows states to waive federal “essential health benefits” requirement and set own standard
• Allows insurers to charge older people up to 5 times as much as younger
• Repeals consumer taxes
• Imposes abortion restriction on tax credits
• Imposes Planned Parenthood restriction for Medicaid
• Requires insurers to allow young adults to stay on parents’ plans until 26
• Allows states to permit insurers to charge more for pre-existing conditions
• Allocates $8 billion to help subsidize people with pre-existing conditions in state high-risk pools
• Prohibits insurers from imposing lifetime or annual limits on coverage
• Establishes “patient and state stability fund” to help states service low-income Americans
Ends individual mandate, imposes surcharge for coverage lapse
The AHCA would rescind the federal mandate that all Americans have health insurance or pay a penalty on their taxes. This would allow people to choose not to purchase coverage if they so desire;
the Congressional Budget Office (CBO) projects thousands of Americans will make that choice. One possible consequence of ending the mandate: fewer healthy people will be part of the insurance pool,
meaning higher prices and premiums for others. To incentivize coverage, the bill would allow insurers to charge a 30 percent penalty on anyone seeking an insurance policy after going a period without it.
Ends Obamacare premium subsidies, offers tax credits instead
The House GOP bill would provide tax credits between $2,000 and $14,000 a year for individuals who don’t get insurance coverage from an employer or the government. The credits would be based on age
instead of income but includes caps for higher income earners. The impact could be staggering, especially for the poor and elderly.
For example: A 64-year-old who makes $26,500 a year could see his or her net out-of-pocket costs increase from $1,700 a year under the current law to $14,600 a year under the GOP plan, according to
CBO estimates. A 40-year-old making the same amount would pay a few hundred dollars more after the tax credits, from $1,700 under Obamacare to $2,400 under the GOP bill.
The independent Kaiser Family Foundation estimates that the tax credit structure may lead to lower premiums in some cases but deductibles will go up — which in turn means higher overall out-of-
pocket costs for many consumers who get sick.
Rolls back Medicaid expansion across 30 states
The Republican plan would raise the bar for Medicaid eligibility among lower-income Americans and cap federal payments to states for the program through block grants. The changes would reduce
federal spending on Medicaid by $880 billion over the next decade, pushing more of the financial burden onto the states, according to the Kaiser Family Foundation. The CBO estimates that 14 million
fewer people would be covered by Medicaid by 2026.
The GOP bill also says that in the next few years, Medicaid plans will simply not have to cover these essential health benefits. States will get to decide what those plans have to cover.
Andy Slavitt, former acting administrator of the Centers for Medicare and Medicaid Services under President Obama, told ABC News that there are real consequences for women on these plans.
“Once something is not required, it becomes difficult for one company to offer it,” Slavitt said in a phone interview. “It can be a tough business decision. The fear is that you may attract only
sicker folks. It can be a race to the bottom in terms of what’s offered.”
Allows states to impose Medicaid work requirement
The AHCA would also expressly allow states to require “able-bodied” adults on Medicaid to show proof of work to get coverage. This will likely lead to more people being kicked off, some experts
say.
Dr. Richard Frank, former deputy assistant secretary for planning and evaluation at the Department of Health and Human Services under President Obama, told ABC News he thought work requirements
would largely impact the mentally-ill or those struggling with addiction, a group that makes up about 30 percent of the folks that fall under that requirement.
“If you take away their coverage because of that you are going to reduce their chance of working rather than if you cover them and get them treatment,” he said.
Expands health savings accounts
The Republican plan would significantly expand the amount of money people can put into a tax-free account for spending on health and medical costs. The current cap of $3,400 per year for an
individual would rise to $6,550 starting in 2018. The limit for families would increase from $6,750 to $13,100.
Changes pre-existing conditions policy
The bill maintains the requirement that insurers cover people with pre-existing conditions and forbids them from charging more based on a person’s health. But it allows states to seek a waiver from
those rules on a case by case basis. People with continuous coverage and pre-existing conditions will not be affected. Those in states that receive a waiver – and experience a lapse in coverage for
two months – could face higher premiums. Waiver states will be required to implement high-risk insurance pools to help those that need coverage; the bill allocates $8 billion over five years to
help underwrite those programs.
Karen Pollitz, a senior fellow at the Kaiser Family Foundation, told ABC News that $8 billion “is not a lot of money.”
She said the $8 billion was enough to cover a couple hundred thousand people, nowhere near the 5-10 million people who have pre-existing conditions and currently get insurance through the
individual markets.
The AARP has also come out against the bill, tweeting that it was an “$8 billion giveaway to insurance companies; won’t help majority of those w/preexisting conditions. We remain opposed.”
Ends federal “essential health benefits” requirement
States will be allowed to seek a waiver from the federal requirement that insurers cover 10 “essential” services in every health plan they offer. Under current law, mental health and substance
abuse services, prescription drugs, preventive care, maternity care, emergency services and lab services are all deemed “essential” and must be included in every plan.
Rescinding this provision in select states would result in lower premiums for some, according to the Kaiser Family Foundation. But “with no benefit requirements, insurance policies could get quite
skimpy,” Kaiser analyst Larry Levitt wrote on Twitter.
“Without a requirement to cover essential benefits, the most likely benefits to go are: Mental health, Substance use, Maternity, Expensive drugs,” he added. “With no required benefits, some (like
mental health or maternity) would be very expensive because only people who need them would buy them.”
Changes rule for pricing health plans by age
Under the GOP plan, insurers would be allowed to charge older Americans more based on their age. Current law stipulates that insurance companies can charge older Americans up to three times the
cost of the prices charged to younger Americans. The new law would raise the ratio limit to five times. States would also be allowed to set their own ratio.
Repeals consumer taxes
The bill would repeal a list of taxes imposed by the Affordable Care Act, including a tax on certain health insurance plans; tax on some brand-name prescription medications; tax on indoor tanning
services; and a tax on the sale of certain medical devices.
The 3.8 percent tax applied to capital gains, dividend, and interest income for families with $250,000 or more in income ($125,000 for single Americans) would also be eliminated. The CBO estimates
that getting rid of this tax would cost the federal government $157.6 billion over 10 years.
Imposes abortion restriction on tax credits
The GOP plan would prohibit women from using any federal tax credits to buy a plan that covers abortion. The new legislation is consistent with the so-called “Hyde Amendment,” which does not allow
taxpayer dollars to go toward abortions except in the case of incest, rape or to save the mother’s life.
Imposes Planned Parenthood restriction for Medicaid
Under the bill, Americans on Medicaid are prohibited from receiving any reimbursement if they visit a Planned Parenthood clinic. Medicaid payments make up the majority of the organization’s
funding, although current law already stipulates that the organization cannot use any government funds for abortion procedures. Instead, the clinics see people on Medicaid for contraception,
screenings and other services.
Republicans argue that these Americans can visit other community health centers. Several leading abortion and contraception rights organizations point out that these centers may offer inferior
care.
The CBO estimates that approximately 15 percent of people currently on Medicaid who visit Planned Parenthood clinics would lose access to care all together, specifically those who “reside in areas
without other health care clinics or medical practitioners who serve low-income populations.”
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