The American Health Care Act, the GOP's plan to repeal and replace the Affordable Care Act, would make some big changes to the rules and regulations enforced under former President Obama's signature healthcare legislation.
While the House of Representative and the Senate take somewhat different views on health reform, both houses of Congress have proposed the elimination of some of the key mandates -- and consumer protections -- Obamacare ushered in. Here are 10 things that would be eliminated from Obamacare if Trumpcare passes.
1. The individual mandate
Obamacare requires that every adult and child have qualifying health coverage, defined to include employer-provided insurance, privately purchased policies with minimum benefits, or government-sponsored coverage like Medicare. Unless you fit into an exemption, going without coverage means making an "Individual Shared Responsibility Payment," a tax equal to the greater of 2.5% of household income or $695 per child and $347.50 per adult as of 2017. With a maximum "shared responsibility" tax of $2,085 in 2017, the individual mandate is one of the most unpopular parts of Obamacare.
Both House and Senate versions of Trumpcare technically eliminate the mandate -- but it's impossible to fully do away with it while guaranteeing coverage for pre-existing conditions. The mandate is Obamacare's mechanism to force young and healthy people to buy coverage. To accomplish the same goal, the House version of Obamacare allows insurers to charge more for policies after a coverage lapse, while the Senate bill imposes a six-month waiting period to buy a policy after a coverage gap. Still, the mandate would no longer be law, and no more Individual Shared Responsibility payments would be collected.
2. The employer mandate
Obamacare's employer mandate requires companies with 50 or more full-time employees to offer affordable health insurance coverage to 95% of full-time workers -- and their kids up to age 26. Full-time workers are defined as anyone working 30 hours weekly or more. Employers could face penalties ranging from $2,260 to $3,390 per employee in 2017, depending on whether the employer failed to provide any coverage or did not provide affordable insurance that paid for at least 60% of covered services.
Both the House and Senate bills eliminate the mandate. There are no provisions in either bill to penalize employers who fail to provide coverage.
3. Tax credits based on comprehensive coverage costs
Obamacare provided Advanced Premium Tax Credits, which are credits taken in advance to pay health insurance premiums. Under Obamacare, credits are calculated based on family income and the local cost of insurance.
The House and Senate versions of Trumpcare both provide tax credits, too -- but they aren't nearly as generous. The House version of the bill bases credits on age only, not actual costs of coverage. The Senate bill calculates credits based on the cost of buying a plan covering 58% of expected healthcare costs, while Obamacare's credits are based on the cost of buying a plan covering 70% of costs.
Because of changes to credit calculations, among other Trumpcare provisions, after-tax premium costs could rise an average of 74% for a comparable health plan under the Senate's version of Trumpcare.
4. Protections for pre-existing conditions
Obamacare ended the practice of medical underwriting. Insurers can no longer consider health status when pricing coverage, and they cannot deny coverage for pre-existing conditions such as diabetes, cancer, or asthma. Everyone must be issued a policy, and insurers must use modified community ratings to price policies. This means insurance must be priced the same for everyone in the same age group in the same community. This is one of the law's most popular provisions.
Trumpcare claims to provide continued protection for pre-existing conditions, but the House version would allow states to request waivers to community-rating requirements, as long as the states had high-risk pools. Insurers could charge sick people more for coverage, and high-risk pools have proven inadequate in the past. The Senate bill also permits waivers that could weaken protections for pre-existing conditions.
5. Guaranteed coverage for essential health benefits
Obamacare mandates that insurance policies sold on the individual market provide coverage for essential health benefits (EHBs), including emergency care, maternity care, mental healthcare, substance abuse treatment, medical devices, laboratory service, preventive care, and comprehensive pediatric care, including vision and dental coverage.
Both the House and Senate versions of Trumpcare allow states to request waivers from EHBs, and experts indicate that even blue states may request waivers.
"With the skimpier subsidies, states are going to be under enormous pressure to apply for these waivers," warned Sabrina Corlette, a research professor at Georgetown University's Center on Health Insurance Reforms.
6. Expanded Medicaid benefits
Obamacare expanded Medicaid to cover families with incomes up to 133% of the federal poverty level. The House bill rolls back expanded coverage by cutting the amount the federal government reimburses states for residents who got coverage under the expansion. The Senate bill also reduces federal funding -- albeit on a different time table -- so both the House and Senate bills would likely force states to reduce coverage due to funding shortfalls.
Both bills would also change the funding calculations for all Medicaid beneficiaries. While states currently receive federal contributions based on actual costs, the House and Senate bills switch to a per-capita funding structure, with costs paid per enrollee based on a growth rate formula that would likely not keep pace with actual expenditures.
7. Obamacare limits on premium surcharges for seniors
Under Obamacare, insurers aren't allowed to charge older Americans more than three times what younger customers pay for premiums. Both the House and Senate versions of Trumpcare do away with this protection, which keeps costs down for pre-Medicare Americans.
The House and Senate bills allow insurers to charge older insurance buyers up to five times what younger policyholders pay. This is expected to raise costs substantially for older Americans. Kaiser Family Foundation estimated premiums for insurance buyers aged 55 to 64 could go up 113% on average if the Senate version of Trumpcare passes.
8. "Medicine cabinet" taxes
Obamacare prohibits the purchase of over-the-counter meds with pre-tax funds from a health savings account or flexible spending account. Before Obamacare, non-prescription drugs could be bought with pre-tax money, but now only insulin is eligible for this savings.
This de facto tax increase would be eliminated if Trumpcare passes, as proposed reforms reestablish the right to buy over-the-counter meds with pre-tax dollars.
9. Taxes on tanning and medical devices
Obamacare imposes a 2.3% excise tax on importers and manufacturers of medical devices, although the tax has yet to go into effect after being delayed for two years by the Consolidated Appropriations Act of 2016. Under both the House and Senate bills, the tax is repealed. A 10% tax on indoor tanning services is also repealed by both versions of Trumpcare.
10. Taxes on the wealthy
While House and Senate versions of Trumpcare both repeal many Obamacare tax increases, higher earners will see the biggest benefits. Trumpcare would eliminate a 3.8% tax on investment income for families earning $250,000 or more, and it would eliminate a 0.9% Medicare surcharge Obamacare put into place on wage income exceeding $200,000 per person or $250,000 per couple.
Under the House version of the bill, families with incomes of $3.9 million or more would get an average tax cut of $207,000, resulting in a 2.6% boost to average income, according to the Tax Policy Center. Households in the lowest tax bracket would get a forecast tax cut of around $150 on average, or a 0.9% income boost. Given Medicaid cuts and less generous tax credits, lower-income families could take a big financial hit if Trumpcare passes, even as wealthy families keep more of their money.
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