“Repeal and replace ObamaCare,” they said. “It’ll be fun,” they said. Well, now it’s happening—and it’s not as fun as it sounded. Are you confused as to what the difference is between the old plan and the new plan, and what the new plan is covering or won’t be covering? Worry no more: this article will cover key differences between the old and new plans, and the new options Republicans are offering.
The Republican Health care bill, formerly known as the American Health Care Act, would eliminate the requirement to have insurance. The tax penalty for lacking insurance implemented by the Affordable Care Act, coined ObamaCare, would be eliminated. Children under the age of 26 will still be able to stay under their parents’ plans in both acts.
Both acts don’t require insurance to give coverage despite having preexisting conditions. However, under the Republican proposal, insurance companies can charge 30% higher premiums for those who don’t have “continuous coverage.” Not having continuous coverage is defined as no coverage for 63 days under a 12-month period.
Under the new bill, Medicaid spending is limited. Under the Affordable Care Act, Medicaid was expanded only to states that opted for the expansion. 31 states agreed to the expansion, and 11 million newly eligible adults enrolled into Medicaid through March 2016. However, under the GOP plan, no new enrollment can occur under the expanded version after December 31, 2019. (Everyone who enrolled before 2020 can keep their coverage.) The Republican plan also is planning to limit the amount of federal funding states can receive per Medicaid enrollee. Under the current program, the federal government guarantees matching fund for qualifying Medicaid expenses, no matter what the cost is.
The new bill still keeps the essential health benefits requirement under the Affordable Care Act, but state Medicaid plans would not have to reach this requirement after December 31, 2019.
Both bills still offer premium tax credits to help people buy insurance. However, in the Affordable Care Act, these credits were based on income. In the GOP proposal, tax credits are based on age. The older you are, the more credits you get. The Affordable Care Act also takes into account the local cost of insurance, raising or lowering the amount of credit in order to limit the amount someone would spend on premiums, but the GOP plan does not. Check out the Kaiser Family Foundation’s interactive map to see how your tax credits may change by clicking here.
The Republican plan gives those earning under 75,000, or 150,000 for a married couple, a fixed amount of money for their age group. For those under thirty, it starts at 2,000 a year and increases in $500 increments per decade until reaching $4,000 a year at age 60. The limit to tax credits is $14,000 per family, and the five oldest family members calculate this amount. If you earn above the income thresholds, the tax credit is reduced by 10% of the amount earned above the threshold. This program starts officially in 2020, but modifications would begin in 2018 and 2019 in order to give more to younger people and less to older people.
Contribution limits for tax exempt health saving accounts has been increased under the new bill. For individuals, it has risen from $3,400 to $6,500, and for families it has risen from $6,750 to $13,100. Money from the premium tax credit can be contributed and won’t count towards the limit. Also, individuals can use HSA money to buy over the counter drugs, which you couldn’t under the Affordable Care Act.
This bill stops funding for payments to places that offer abortions for reasons other than rape, incest, or danger to the life of the mother. This includes Planned Parenthood. However, under the Affordable Care Act, Planned Parenthood can’t use federal money for abortions for reasons other than the ones stated above. Tax credits cannot be used to purchase insurance that covers abortion beyond those three reasons.
It was mentioned earlier that older citizens get more tax credits. However, under the new bill, the cost older people pay would also increase. Under the Affordable Care Act, older and sicker paid less in exchange for younger and healthier people paying more. However, under the new GOP bill, the opposite is the case.
The S&P Global Ratings estimates that the number of people insured will drop by 6 to 10 million people. But I can’t really tell you how this bill affects you personally. This will vary depending on your own specific situation. Take this information, check out the links, and decide for yourself which plan you like better.
