On the third try, the House of Representatives has finally passed a slightly amended version of the American Health Care Act. It now heads to an uncertain future in the Senate.
In general, the winners are the young, healthy, and affluent, and the losers the older, sicker, and poorer. But the AHCA could potentially make it harder for anyone not on Medicare to obtain truly comprehensive health insurance that covers the full gamut of essential health benefits. Here are the six most important things to know about this legislation.
1. An estimated 24 million people will lose their health insurance. That’s according to a Congressional Budget Office analysis of an earlier version of the bill.
Fourteen million would be kicked off Medicaid, because over the next 10 years, the AHCA cuts Medicaid spending by $880 billion. The rest would lose coverage on the individual market that was subsidized and expanded by the Affordable Care Act.
2. Insurance will cost more for moderate-income people. The ACA has income-based subsidies that, in effect, protect people with incomes below 400 percent of the Federal Poverty Level from having to pay more than a certain percentage of their income toward health insurance.
About 85 percent of people buying on state insurance exchanges claim those subsidies. The AHCA replaces this system with fixed subsidies that increase only with age (although not enough to offset another feature of the bill, which gives insurers the right to charge older buyers higher premiums than they can today). Consumers in high-cost states could be facing massive premium increases. Use this Kaiser Family Foundation interactive to find out how you might be affected.
3. Rich people will get a tax cut. The ACA raised billions for those subsidies through an extra 0.9 percent payroll tax that kicks in when an individual’s income tops $200,000 in a year ($250,000 for married couples); and a 3.8 percent tax on investment income for households with those same income profiles. The Committee for a Responsible Federal Budget just estimated that those taxpayers will get a windfall of $265 billion over the next decade. For good measure, the AHCA would also repeal ACA taxes on insurance companies and medical devices.
4. Insurance companies can start charging more for pre-existing conditions. That became illegal under the Affordable Care Act, but the AHCA would allow states to opt out of that requirement. The Center for American Progress has estimated that premium surcharges could be astronomical for certain conditions: $28,230 for breast cancer, $17,060 for pregnancy, $5,510 for diabetes. Conversely, people in perfect health would likely see their premiums go down.
5. Health plans, including those from large employers, might not cover services like maternity or mental health care. The ACA requires all health plans to cover all “Essential Health Benefits,” but the AHCA allows states to opt out of this provision, too.
The Brookings Institution determined that because of the peculiarities of health plan regulations, an employer who wanted to save money on health benefits could situate its insurance plan in a state that allowed skimpy benefits—then apply it to all employees no matter where they live.
6. People who can’t or won’t buy health insurance won’t face a fine. The AHCA eliminates the individual mandate to have health insurance by zeroing out the tax penalty for not having it.
Nancy Metcalf is an award-winning independent journalist specializing in health topics. A senior writer and editor for Consumer Reports for more than 25 years, she is a nationally recognized expert on health insurance and health reform.