The long-awaited GOP plan to repeal and replace Obamacare is here. The American Health Care Act (AHCA) is also being called RyanCare for House Speaker Paul Ryan, or TrumpCare for the President. There have been a number of bills introduced to repeal and replace, but this is the one officially endorsed by the Trump Administration and the Republican Congress.
Earlier this week, nonpartisan number crunchers at the Congressional Budget Office (CBO) reported that by 2018 at least 14 million people will be uninsured under the proposed legislation. By 2026, that number increases to 24 million. The White House analyzed the plan, as well, and their numbers are even worse. They expect at least 26 million will lose health insurance by 2026.
In March 2010, the Affordable Care Act (ACA) was signed into law by President Barack Obama. The goal of the ACA, branded as Obamacare by the GOP, is to provide affordable healthcare to all people. Before the law went into effect, 44 million people were without healthcare coverage. By 2015, the number of uninsured declined to 28.5 million. Some of the most impressive gains in coverage happened between 2013 and 2015. The uninsured rate for non-elderly adults decreased from 20.4% to 12.8%. For the poor, it declined by 10%.
Now, Americans who received health insurance under the ACA face the prospect of losing their healthcare coverage with the new GOP plan. Let’s take a look at why.
Big Changes in the American Health Care Act
The AHCA keeps a few ACA provisions in place. However, the handling of many healthcare components shifts to each state. Individuals and families are more responsible for shopping, comparing, and obtaining health insurance, as well as managing healthcare.
Here are 5 things you need to know about this proposed law:
It replaces income-based premium subsidies and cost-sharing reduction payments with a fixed-dollar, age-adjusted tax credit.
AHCA encourages the use of health savings accounts (HSAs). See the opinion of one reader about the likelihood of the general population adopting such use.
The bill eliminates ACA’s continuous coverage mandate. Read below about the less-talked about penalty for not maintaining health insurance.
The responsibility for the Medicaid program moves back to individual states.
AHCA reduces or eliminates federal funds for Medicaid expansion states. Over 11 million people receive coverage through ACA’s expansion of Medicaid.
How the American Health Care Act Impacts You
The American Health Care Act allows non-Medicare insurance carriers to charge the elderly five times its prices for younger individuals. Lawmakers say older people have more medical problems, making them more expensive for insurance companies. On top of that, an elderly person only receives a tax credit of two times a younger person’s, even though they tend to have less income.
When people carry health insurance, AHCA mandates they maintain continuous coverage. If coverage lapses due to loss of a job, non-payment, cancellation or another reason, a 30% premium surcharge is imposed when purchasing a new policy. This has the potential to discourage coverage entirely for those who do not want to pay that penalty when a gap occurs.
Rather than continuing many important programs defined by the Affordable Care Act, the law sends $100 billion in healthcare grant money to the states. But will the states disburse the funds appropriately? Will the so-called block grant funds be sufficient for the medical needs of the population? States with large low-income populations face severe impact. Especially since by 2020, the Medicaid expansion is eliminated.
Health savings accounts work well for the wealthy and the full-time employed. But if the poor currently can’t afford health insurance premiums, how can they (or the chronically ill) set money aside for a health savings plan?
If you are concerned about the upcoming changes in our health care system, consider sending your Congressman and Senators an email on their official web sites. When you live in their district or state, they represent you. It doesn’t matter how you voted.