On Monday, March 6, US House Republicans released their long-awaited American Health Care Act legislation to “repeal and replace” the Affordable Care Act (aka Obamacare). The House Energy and Commerce and the House Ways and Means committees reviewed the proposal and it’s now before the Budget Committee. The political jockeying is already reaching a fevered pitch. The American Medical Association (AMA) came out in opposition to the legislation as it is currently written. Read the AMA’s statement and letter to the Committee chairs.
Below, in brief, is what the GOP is proposing in its 123-page bill, which some are calling “TrumpCare”:
- Insurers cannot deny coverage for pre-existing conditions as was also the case under the Affordable Care Act (ACA). The bill eliminates the requirement that state Medicaid programs offer ‘essential health benefits’ as defined by the ACA as of 2020.
- Young adults can stay on their parents’ health insurance plan until age 26, which was allowed under the ACA.
- The individual and employer mandates to have insurance coverage and the penalties for not having coverage would be repealed. Beginning in 2019, as an incentive to have continuous coverage, the new legislation allows insurers to assess a flat 30 percent of the monthly premium late-enrollment surcharge on top of their base premium for an applicant who went longer than 63 days without continuous health insurance coverage in the previous year.
- The bill establishes a Patient and State Stability fund to help states set up ‘high-risk’ pools, help low-income patients and stabilize insurance markets.
- Federal Medicaid funding for states will change to a “per capita cap” beginning in 2020.
- Repeals Medicaid expansion meaning no new enrollees. Those currently covered under the expansion criteria that their income is at 138 percent of the Federal Poverty Level (FPL), would continue to be covered until 2020 until they leave the program on their own.
- For states that did not expand Medicaid eligibility, the bill provides $10 billion over five years for ‘safety net funding.’ The amount each non-expansion state receives would be calculated baked on the number of state residents with income below 138 percent of the FPL relative to the total number of individuals with income below 138 percent of the FPL for all non-expansion states. If a state implements the ACA Medicaid expansion during the year, this safety net funding would no longer be available.
- Beginning in 2020, a refundable tax credit will be available to help people buy health insurance. The credit would be based on age rather than income.
- Under age 30: $2,000
- Between 30 and 39: $2,500
- Between 40 and 49: $3,000
- Between 50 and 59: $3,500
- Over age 60: $4,000
- The credits are additive for a family and capped at $14,000.
- Insurers can charge older customers five times as much as young adults.
- The bill removes the limit on tax breaks for employer-sponsored health coverage.