On May 3, 2017, the House of Representatives passed the American Health Care Act. This will take at least until August before it goes back to the House. Congress must reconcile the two bills before it can go to President Trump for signature. It is very important to note that if you currently have coverage under Obamacare, as long as you continue to pay your premiums you will still continue to have coverage for all of 2017. Even if the AHCA passes the Senate and the bill is not vetoed by President Trump, nothing changes with your current coverage under Obamacare for 2017.
How does American Health Care Act(Trumpcare) differ from Obamacare?
1. Elimination of the penalty.
Obamacare required every American to obtain health insurance, or pay a penalty of $695 of 2.5% of your annual income. AHCA would allow people not to purchase health insurance if they choose. There would also be new continuous coverage incentives implemented, so individuals without 12 months of continuous coverage would be assessed a temporary 30 percent premium surcharge. They are hoping to implement this change in time for the 2018 Open Enrollment.
2. Replaces Obamacare premium subsidies with tax credits.
The Obamacare subsidies will be renamed as tax credits and will range from $2,000 to $14,000 based on age — with families receiving higher credits than individuals.
The credits will be reduced for individuals making over $75,000 annually and for families making over $150,000 annually.
3. Allows states to obtain waivers to change “essential health benefits”.
Obamacare imposed federally established minimum benefits that all health insurance policies had to offer. These “essential health benefits” included mental health and substance-abuse services, prescription drugs, preventive care, maternity care, emergency services and lab services. AHCA will allow states to apply for waivers that allow them to change these minimum benefits for purposes such as reducing healthcare coverage costs and increasing the number of people with healthcare coverage.
4. Allows states to obtain waivers to allow insurers to charge more for pre-existing conditions. Creating a new high-risk pool.
Under Obamacare, health insurers are prohibited from charging higher premiums for individuals with pre-existing conditions. AHCA would allow states to obtain waivers to allow insurers to charge more for people with pre-existing conditions. Those enrollees would have to have let their coverage lapse, and the state would have to set up a risk program — such as a high-risk pool — that, in some cases, could provide help to those being charged higher premiums.
5. Allows insurers to charge older adults more than rates charged for younger adults and allow states to request federal waivers to modify market rules such as the limitations on rating based on age.
Obamacare limited insurers to charging older adults a maximum of three times the rates charged to younger adults. AHCA would raise the ratio limit from three to five. They would like this to take effect as early as 2018.
6. Allows states to implement Medicaid work requirement
AHCA would allow states who choose to do so to require “able-bodied” Medicaid recipients to either work, participate in job-training programs, or help with community service.
7. Repeals Obamacare Consumer Taxes
Obamacare included a laundry list of taxes, such as a tax on some health insurance plans, a tax on certain prescription drugs, a tax on indoor tanning services, a medical device tax, and a capital gains, dividend, and interest income tax for higher-income Americans. AHCA eliminates all of these taxes.
These changes have been approved by the House and have been passed on to the Senate. It is unknown how long this will take or if it’ll be in force by Open Enrollment. Carriers have not released any specifics about their 2018 plans or acknowledged if they will be making any changes.
I will continue to send updates as they become available. If you have any questions about these proposed changes, please feel free to contact me at 708-544-0050 or [email protected]