After much anticipation, House Republicans have revealed their alternative to the Affordable Care Act. The new American Health Care Act promises many changes ranging from tax incentives to a halt on Medicaid expansion. Despite meaningful progress, the bill faces challenges. Even among republicans, there is still discord between moderate and hard-right conservatives like Rand Paul, who has dubbed the new plan “Obamacare Lite.” The bill has yet to receive a price tag, and certain features, such as opening state lines to promote competition are noticeably missing (President Trump tweeted on March 7th that the elimination of state lines will be rolled out in phase 2 and 3 of the bill). Look to see the politicians battle over the details and rhetoric in the coming months —as of right now, here are some of the more relevant points of the American Health Care Act:
End of the Employer Mandate
Most businesses will no longer be required to offer health insurance, instead letting the market decide what benefits are appropriate.
End of the Individual Mandate
Individuals will no longer be required to buy insurance. However, continuity of coverage is encouraged due to premium surcharges for prolonged gaps in coverage.
Tax Credits to Low & Middle Income Americans
Certain Americans will be eligible for tax credits to purchase insurance, ranging $2,000 to $14,000, depending on age and family status.
Medicaid Expansion Controlled
States will be given a fixed amount of money to provide to Medicaid patients, halting the trend of spiraling Medicaid costs.
Pre-Existing Condition Modified
Building off of an ACA provision, Americans with pre-existing conditions will still be allowed to buy insurance without penalty, but will face a 30% premium surcharge if they go without coverage for a defined period, helping eliminate adverse selection.
Expansion of HSA’s
Health Savings Accounts have long been touted to help consumers control their own health care spend. Under the American Health Care Act, consumers will be able to increase contributions to their HSA accounts and will have a greater range of options for spending their funds. Individuals can contribute up to $6,550 and families can contribute up to $13,100.
Taxes Delayed, Future Uncertain
Rather than eliminating taxes associated with high-cost health insurance plans, the American Health Care Act is delaying these taxes until 2025, which were previously delayed until 2019.