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Ten Ways Health Coverage Might Change if Health Care Reform is Passed

One of the major pieces on the Trump administration’s legislative agenda is repealing and replacing the Affordable Care Act (ACA), also known as Obamacare.  After a strong push by the President, the U.S. House of Representatives passed the American Health Care Act (AHCA)in May and the Senate presented their own version of a health care reform bill entitled the Better Care Reconciliation Act (BCRA), although it is yet to go to a vote.

Both of these reform proposals would radically alter the health care system in the United States in the following ways:

  1. Millions might lose health coverage: Under both the AHCA and the BCRA, it is likely that millions of Americans—many of whom obtained health insurance through ACA-sponsored health insurance marketplaces or the Medicaid expansion—would lose their health insurance.  The Congressional Budget Office estimated that more than 23 million Americans would lose coverage over ten years if the AHCA was passed, and more than 22 million would lose coverage under the BCRA.
  2. Loss of Essential Health Benefits: Under the Affordable Care Act, all health plans had to include Essential Health Benefits. These mandatory benefits included maternity care, emergency services, prescription drugs and hospitalization among others.  If the new House or Senate bill is ratified, then insurers would be free to decide what to include in their plans.
  3. Return of lifetime/annual limits: The ACA also barred insurers from imposing annual or lifetime limits on their coverage. Prior to that, insurers could set a cap on how much they were willing to pay out over a year or the life of the policyholder. If the new reforms are enacted, then very sick people could lose coverage if they go beyond these limits.  This is especially problematic for people insured through their employer, as most employer health plans had lifetime limits prior to ACA.
  4. Rollback of Medicaid:  One of the major components of Obamacare was granting federal funds to willing states so that they could enroll more people in Medicaid. Almost 70 million Americans are currently enrolled in the program that insures people at or below the federal poverty line.  If the new reforms are signed into law, the federal government would slowly cut funding by almost $772 billion to these state Medicaid programs over ten years. The Congressional Budget Office predicts that nearly 14 million people will lose Medicaid coverage as a result of these funding cuts.
  5. No protection for sick people: A major change that the Affordable Care Act created in the insurance industry was eliminating discrimination against people with pre-existing conditions.  The law prevented insurers from turning away or raising insurance rates for sick people.  However, under the House’s American Health Care Act, states could ask for a waiver that allowed insurers to once again consider the health of enrollees in determining eligibility and premiums.  On the other hand, the Senate’s Better Care Reconciliation Act does not blatantly allow insurers to reject applicants or raise their monthly premiums, but it does allow insurers to modify the benefits in a health plan. In effect, this would essentially shut out sick people who would have to pay more for a comparable plan that a healthy person might get at a much lower price.
  6. Poorer people would pay more: While people enrolled under Obamacare enjoyed generous government subsidies to help pay for their monthly health insurance premium, there would be considerably less financial support under the new proposals.  Under the House bill, taxpayers would receive a tax cut to help pay for insurance rather than subsidies; this would benefit primarily middle class taxpayers who pay more in taxes.  The Senate bill uses subsidies but lowers the maximum income eligibility requirement.  This means fewer middle class households would qualify for government subsidies.
  7. Older Americans would pay higher premiums: Both the House plan and the Senate plan would make it more expensive for older Americans to obtain health insurance.  The AHCA would remove the Obamacare requirement that older Americans could only be charged three times what a younger American would pay for a similar policy, inevitably raising the rates for those aged 50 to 64. The Senate bill would also allow insurers to raise the rates on older policyholders, although there would small tax credits that would help offset the rate increases.
  8. Limited health coverage: The Affordable Care Act was designed to help pay almost 70 percent of medical costs (although some plans covered more or less than this target amount), but the new Senate proposal would target only about 58 percent of medical expenses. This would translate into higher premiums, deductibles and/or co-pays for most policyholders, but it would place less of a financial strain on the federal government.
  9. Eliminate the individual mandate: The Republicans have long opposed forcing Americans to buy health insurance, so it is not surprising that their new health care reform bills would eliminate the individual mandate. The individual mandate was a feature of the Affordable Care Act that financially penalized people who did not possess health insurance.  Although deeply unpopular, it was intended to force younger and healthier people into the health insurance risk pool and make insurance less costly for the overall U.S. population. The new Senate bill eliminates the mandate, but it also penalizes anyone who goes without coverage for at least 63 days, by making them wait a mandatory six months to enroll again.
  10. Create funds for high-risk people: Under the new reform packages, states or insurers would have the option to consider the health of applicants in setting premiums and plan benefits. To help pay for the additional costs of insuring these enrollees with pre-existing conditions, Congress would create funds to help states or insurers. Under the Senate proposal, the Centers for Medicare and Medicaid Services could authorize up to $50 billion in payments directly to insurers and up to $62 billion in payments to state governments.

If you would like to learn more about the impending health care reforms, the representatives at Boost Health Insurance are always available.

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