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What the Failure of the American Health Care Act Means for You

Whether you are a business owner, head of a household, or merely a concerned consumer, you have probably been following the efforts of the Trump administration and the Republican-controlled Congress to repeal and replace President Barack Obama’s Affordable Care Act.  As fulfillment of years of campaign promises, GOP leaders crafted and introduced the American Health Care Act which would have removed the Individual Mandate—the tax penalty for not having health insurance—and replaced government subsidies with tax credits.

The American Health Care Act may have proven a worthy successor to the ACA, but due to political opposition from Democrats and far right Republicans, the AHCA never reached the House floor for a vote.  While this was a surprising defeat for GOP lawmakers and President Trump, the Republican Party soon regrouped and promised that they would continue to work on an ACA repeal.

ACA Remains the Law of the Land

If you have obtained your health coverage through one of the state or federal health insurance exchanges, then you can be assured that your policy will remain in effect throughout the remainder of the calendar year.  Because Congress could not pass a repeal of the Affordable Care Act, it remains on the law books until lawmakers can pass a bill to abolish it. Although Congress is still trying to craft such a bill, it remains unlikely that they will do so before 2018.

Similarly, if you are an enrollee in Medicaid due to the ACA-sponsored state expansion, then your benefits will likely remain the same. Although the Trump administration had tried to push through new Medicaid changes like a work requirement and some premium contributions in the American Health Care Act, the failure of the bill prevents those changes from being enacted.

It also appears unlikely that any new repeal efforts will include a serious reduction in benefits to new Medicaid enrollees. Many moderate Republicans in the House and Senate, as well as Republican governors, were deeply concerned about elements in the American Health Care Act Means that cut off Medicaid benefits because of how it would impact the millions of new enrollees in their home states. If there are any major changes to Medicaid in a future repeal effort, it will most likely allow state governments to modify implementation rather than roll back benefits at the federal level.

Obamacare System Needs Changes

Although the Affordable Care Act remains in force, that doesn’t mean it is performing as it should. There are significant problems with many aspects of the current health insurance marketplaces that will require some form of intervention. This may come from President Trump, the Department of Health and Human Services or Congress, but without some changes, Obamacare may soon become unviable.

The first issue is the steadily rising premiums for most policies.  This is primarily the result of diminishing competition in the markets.  As more insurers like Aetna, Humana and UnitedHealthcare pull out of many regional markets, consumers are left with fewer insurance options.  Without competition, the remaining insurers are free to raise premiums.

While the Obama administration was considering creation of a federal insurance option to suppress premium increases, it appears unlikely that a Republican administration would use a similar strategy. A strong proponent of free markets, Trump may utilize some financial incentives like tax breaks to encourage insurers to offer affordable plans.

The second major issue is related to the kinds of policies available on the marketplaces.  Many of these health plans have very high deductibles that make this coverage almost unusable. Some family plans found on the ACA exchanges may have annual deductibles greater than $10,000, preventing policyholders from getting reimbursed until they rack up more than $10,000 in medical expenses.

How the Repeal Effort is Progressing

If you got your health coverage from the ACA-sponsored exchanges you are probably sighing in relief, but Congress and the Trump administration are continuing to work on a repeal and replacement of the Affordable Care Act. This time, however, President Trump is leading the effort to design the new proposal, rather than House Speaker Paul Ryan who authored the American Health Care Act. This suggests that this new effort will have the full support of the White House behind it.

It has already been reported that Vice President Mike Pence has met with the House Freedom Caucus—an ultra-conservative group that was instrumental in the demise of the American Health Care Act—as well as the Tuesday Group, a House caucus of moderate Republicans. In order for this next repeal proposal to pass, the President will need the support of both wings of the Republican Party, but it will be difficult to reconcile their interests, especially the more conservative desire to totally abolish Obamacare.

So far, there are only discussions among the major political players with only vague rumors of what an eventual bill might include. For example, the Freedom Caucus is adamant that a new bill not include a community rating requirement—which barred insurers from charging sick enrollees more. While this and other issues are on the bargaining table, it is still far from certain that this would be included in the final bill.

Take Advantage of the Current Situation

Even if you are ideologically opposed to Obamacare, you probably still want to save money.  You can do that by consulting with a respected insurance broker like Boost Health Insurance, who can provide reliable advice about which health plans are available in your area, which benefits might be most desirable for you, and how to take advantage of federally-subsidized discounts.

At some point in the future the Trump administration may repeal the Affordable Care Act, but until then, you can save thousands of dollars a year on highly valuable health coverage. You may need to meet some federal requirements like enough annual income and being up-to-date on your tax filings.  If you have any questions, you can find the answers with an insurance professional from Boost Health Insurance.

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