Republicans Unveil the American Health Care Act to Replace the Affordable Care Act

Republicans Unveil the American Health Care Act to Replace the Affordable Care Act

Years of appeals to dismantle the Affordable Care Act by many Republicans culminated with the unveiling of the American Health Care Act by House leadership in early March. The bill has drawn criticism from both sides of the aisle with a number of conservatives labeling it as “Obamacare-lite” and many liberals taking issue with the proposed system of tax credit allocation. [1] Health and Human Services secretary Tom Price, a former physician, says the administration “believes strongly” that the plan put out by the Republican leadership is “much better than the one that’s there now.” [2]

The proposed legislation keeps three popular components of the Affordable Care Act. It preserves the prohibition on denying coverage to those with pre-existing conditions, it keeps the rule allowing children to stay on under the plans of their parents until the age of 26, and it maintains the ban on lifetime caps on coverage. [1] The AHCA replaces the unpopular ACA provision that charges those who choose not to have healthcare coverage. Instead of the mandate, the new plan proposes a penalty of up to a 30 percent increase in premiums for those who let their coverage lapse. [1] The Republican legislation also scraps the requirement for large employers, defined as having at least 50 full-time employees, to offer coverage for their employees. [1]

Instead of a tax credit system derived from a combination of average coverage costs in an area and income, which was used under the ACA, the replacement plan offers tax credits based heavily on age. [3] For example, those earning under $75,000 get fixed amounts for their age groups. [3] Those under 30 would get $2000 with the tax credit which increase by $500 increments for each decade in age. [4] Under the Affordable Care Act, insurers could charge older individuals up to three times more than younger ones. The AHCA allows for insurers to charge older people up to five times as much as younger people. [6]

The Republican plan greatly changes the way in which Medicaid, a health care system for low-income Americans, operates. Prior to the Affordable Care Act, Medicaid was targeted to specific segments of the population that included low-income pregnant women and the disabled. Under the ACA, the program was expanded to cover people below 138% of the poverty line which is about $15,000 for an individual. [3] The AHCA continues the previous administration’s Medicaid expansion until 2020. However, in 2020, Medicaid enrollment will “freeze” meaning that states will no longer be able to sign up new enrollees unless they are able to shoulder the costs. [3] Medicaid funding will take a new direction under the Republican plan. The ACA funds all medical bills of Medicaid enrollees regardless of cost. However, the AHCA outlines a “per capita cap” in which states get a certain monetary sum per enrollee. [3]  

The Congressional Budget Office, a nonpartisan organization that provides Congress with economic analyses, estimates that 14 million people will lose coverage in the next year if the bill is passed. [5] By 2026, the number of uninsured would increase to 24 million Americans. [5] The CBO also estimates that, on average, premiums will be 10% lower a decade from now. A 21-year-old in 2026 would see premiums 20% to 25% lower and a 40-year-old would see an 8% to 10% decrease as well. [5] However, older Americans would still see higher average premiums even as time goes on. [6]

The bill, which needs 216 “yeas” to pass, will be subject to a vote on in the House of Representatives on Thursday, March 23rd. [7] It is expected that Democrats will unanimously vote against the bill. [7] However, many Republicans are also considering opposing it. If Democrats unanimously vote against the bill, it would be halted with 22 Republican “nay” votes. [7] President Trump remarked, after meeting with members of Congress, “I think we are going to get a winner vote.” [6] Senate Minority Leader Chuck Schumer had conflicting thoughts, remarking that the bill was “in trouble.” [7] Regardless of the outcome of Thursday’s vote, many can agree that the debate over healthcare for Americans is an important one to be had.

References:

  1. Kaplan Thomas and Pear Robert, “House Republicans Unveil Plan to Replace Health Law,” The New York Times, March 6 2017, https://www.nytimes.com/2017/03/06/us/politics/affordable-care-act-obamacare-health.html

  2. Fox Lauren and Lee MJ, “HHS Secretary Vows GOP Health Care Bill is ‘So Much Better’ Than Obamacare,” CNN, March 16 2017, http://www.cnn.com/2017/03/15/politics/tom-price-town-hall-cnntv/

  3. Kliff Sarah, “The American Health Care Act, Explained,” Vox, March 6 2017, http://www.vox.com/2017/3/6/14829526/american-health-care-act-gop-replacement

  4. Gore D’Angelo, “Q&A: The Facts on the Republican Health Care Bill,” USA Today, March 8 2017, http://www.usatoday.com/story/news/politics/2017/03/08/republican-health-care-bill-facts/98917660/

  5. Horsley Scott, “Congressional Budget Office Releases Report on GOP Health Care Bill,” NPR, March 13 2017, http://www.npr.org/2017/03/13/520021409/congressional-budget-office-releases-report-on-gop-health-care-bill

  6. Luhby Tami and Ridgway Nicole, “If You’re Older and Lower income, Prepare to Pay More under GOP Health Bill,” CNN,  March 13 2017, http://money.cnn.com/2017/03/13/news/economy/cbo-premiums-republican-health-care-plan/

  7. Fox Maggie, “GOP Health Care Bill,” NBC, March 21 2017, http://www.nbcnews.com/health/health-care/gop-health-care-bill-tweaks-ahca-make-people-hate-it-n736466

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