The American Health Care Act, the Republicans’ controversial legislation to repeal and replace the Obama administration’s health care law, was approved by the U.S. House today, sending it to the Senate, where it could be drastically changed and possibly even killed.
Here’s a rundown of some of the major components of the legislation as currently written:
Does the bill repeal Obamacare?
Yes, although not quite all of it. The bill does away with most of the Obama law’s taxes and penalties, including those against people who don’t buy coverage. However, some of the Affordable Care Act’s protections would remain, including the popular provision requiring insurers to allow parents to keep their adult children on their family policies until they turn 26. The proposal also provides tax credits to help people pay for insurance or medical bills, but those credits are generally expected to be smaller than what many Americans currently receive from the ACA.
Under the ACA, the size of an individual’s credit was based on their family income, local cost of insurance, and their age. Under the GOP plan, the credit is based on age alone, and the extra credit for lower income people disappears. So, paying for insurance for lower income people will become more difficult, since their premiums will be higher under the American Health Care Act.
The bill also allows insurers to impose a large surcharge on people who allow their coverage to lapse. And while credits would increase based on age, the law also permits insurers to charge higher premiums to older consumers. So, low income older people will get two big hits, the loss of their income-based credit and an even higher insurance rate because of their age.
What about Medicaid?
The legislation makes some significant changes to the federal-state health care program for low-income earners, particularly for states that expanded their program under the Affordable Care Act. The Obama law allowed states to enroll adults making up to 133% of the federal poverty level and increased the federal cost share for those new enrollees.
The American Health Care Act would continue the expansion until 2020. After that, states would be able to continue to enroll newly eligible Medicaid recipients, but the federal government will not pick up the larger cost share. Medicaid recipients who drop from the program would be eligible to re-enroll, but the federal government would not provide the enhanced cost share for them. Critics contend this will ultimately cause a reduction in enrollment.
In addition, the GOP bill also calls for federal dollars for states to be capped at a set amount per person or states can choose to receive a lump sum block grant. That change should reduce the program’s cost, but critics say it will likely force states to reduce benefits or eligibility.
What’s this MacArthur amendment do?
The amendment, named after its author, New Jersey Republican Tom MacArthur, give states the option to seek waivers from some of the things that were required to be covered by insurance policies under the ACA. Some of items states could cut out of insurance coverage could include: prescription drug benefits, mental health, substance abuse treatment and maternity care. For their request to drop essential services, states just have to attest that doing so is intended to bring down the cost of premiums or increase the number of insured residents.
What about pre-existing conditions?
MacArthur’s amendment specifies that insurers cannot refuse to cover people because of any pre-existing health conditions, but it does allow states to apply to waive the ACA’s “community rating” rule, which prevents insurers from charging higher premiums based on consumers’ health status, provided they create their own “high-risk pool,” or participate in a federal risk pool to help sick people obtain affordable coverage.
The legislation provides over $100 billion for those risk pools, including an additional $8 billion included in a late amendment approved Thursday. However critics contend the funding will not be enough to spare people with pre-existing conditions from higher insurance costs or reduced coverage.
The nonpartisan Congressional Budget Office predicted that some 24 million Americans might lose health care coverage by 2026 if an early version of the legislation becomes law, mostly because of rising premiums and the end of the individual mandate. The CBO has yet to score the bill following the changes made by MacArthur and other lawmakers.
Republican proponents say the bill, plus additional legislation and administrative actions to increase competition and reign in health care costs, should cause premiums to drop and give consumers more choice. They also argue that leaving the Affordable Care Act in place will cause the individual marketplace to collapse.
Democrats counter that the Republican bill amounts to a huge tax cut for the wealthy at the expense of poor, elderly and sick. They want Republicans to negotiate fixes for some of the ACA’s problems rather than scrap the existing law.
The Senate will take up the legislation. Democrats have vowed not to support it, but they won’t be able to use a filibuster to stop it because of an earlier budget resolution approved by both chambers. The bill will still likely undergo changes to appease some concerned Republicans. Whatever changes the Senate makes would then need to be approved by the House. President Donald Trump could then sign it into law.