Since Nov. 8, 2016, when Donald Trump was declared the next President of the United States, there was the belief that the Affordable Care Act (ACA), the landmark healthcare legislation put in place by former President Obama, was living on borrowed time. Trump campaigned on repealing and replacing Obamacare, as the ACA is more commonly known, and Republicans retained a majority of seats in the House and Senate, which was supposed to make the repeal and replace process even easier.
However, as Trump has learned over his first three-plus months in the Oval Office, change comes at a snail's pace in Washington.
In March, House Republicans and President Trump introduced the American Health Care Act (AHCA), which some have dubbed "Trumpcare." The bill was expected to easily sail through the House given that Republicans maintained a majority of seats, but that didn't prove to be the case. Less than three weeks later, the AHCA was pulled before the vote could take place, because right-leaning Republicans in the Freedom Caucus felt the bill didn't go far enough to repeal Obamacare's laws, while a more moderate group of Republican lawmakers felt it took away too much from their constituents. In effect, the AHCA was left in limbo, and it appeared that Obamacare would remain the health law of the land for the near future.
Surprise! House Republicans passed a new health bill
Late last week, the made-for-TV-drama that is the United States Congress took another stunning turn. After enacting a small handful of amendments to the AHCA, the House now had enough votes to pass the measure. On Thursday, May 4, by a vote of 217 to 213, the AHCA passed the House and now moves onto the Senate, where it'll likely face more changes and scrutiny.
The new version of the AHCA kept all of the key points of the original AHCA, as well as added two new amendments. Let's have a brief look at the key provisions of the original AHCA, which was presented in March.
- As expected, all of Obamacare's individual and employer mandates will be repealed, and any penalties associated with not purchasing health insurance will be removed.
- Income-based subsidies will go by the wayside and be replaced by age-based tax credits.
- Medicaid expansion will go away beginning in 2020, and future Medicaid distributions will be parsed out to states on a per-capita basis.
- The annual contribution to health savings accounts will nearly double.
- Insurers will be allowed to charge older adults up to a 67% higher premium than under Obamacare relative to young adults.
- Insurers are also allowed to tack on a 30% premium surcharge for consumers who didn't have continuous health coverage in the previous year.
- The bill sets aside a cumulative $100 billion between 2018 and 2026 to aid states with higher-risk, sicker patients.
- The net investment income tax and Medicare surtax, which applied to modified adjusted gross income above $200,000, will go away.
- A handful of Obamacare provisions will be kept, including children being allowed to stay on their parents' plan until age 26 and minimum essential health benefits.
Here's what changed with AHCA version 2.0
These were the nuts and bolts of the original AHCA that failed to be voted on in March. Here are the two new amendments that Republican lawmakers added to compromise with members of its own party who'd initially rejected the first version of this bill.
1. The Upton Amendment: The Upton Amendment, named after Rep. Fred Upton (R-Mi.), adds another $8 billion on top of the aforementioned $100 billion to cover high-risk patients with chronic and/or pre-existing conditions. This amendment was put in place to help satisfy more moderate-leaning Republicans who felt the AHCA took too much away from their constituents.
2. The MacArthur Amendment: The MacArthur Amendment, named after Rep. Tom MacArthur (R-NJ), adds a provision to the AHCA that allows states to decide whether or not they want to adhere to the 10 minimum essential health benefits currently found with Obamacare plans. States would have the option of exercising a waiver to exclude themselves from these health benefits with the goal being to allow insurers more flexibility in building and pricing their plans, as well as formulating their networks. This Amendment was put in place to satisfy the Freedom Caucus, which felt the AHCA didn't distance itself from the rigorous mandates of the ACA on insurance companies.
The greatest AHCA myth of all
Let it be known, there's a mountain of criticism and a sea of praise for the AHCA. The story you get really just depends who you talk to.
However, there's also a pretty pervasive myth surrounding the recently passed version of the AHCA that needs to be put to bed for good. This myth suggests that the AHCA is going to do away with the pre-existing conditions clause associated with Obamacare. This is the clause that denies insurers the ability to turn away consumers with pre-existing conditions.
Whether you support or are against the AHCA, one thing is perfectly clear: the pre-existing conditions clause remains intact. Insurers cannot turn away consumers because they have a pre-existing or chronic condition that could be costly to treat (which is the same policy as we see under the ACA).
But... it doesn't mean there aren't changes being made to the way insurers price their policies for persons with pre-existing conditions.
For instance, even though persons with pre-existing conditions can't be denied insurance, it doesn't mean they'll be paying the same price for insurance as their healthier peers. The AHCA would allow insurers to seemingly reinstitute some of the pricing practices we witnessed prior to the implementation of Obamacare. In other words, a pre-existing illness could result in a substantially higher premium compared to someone of the same age and location, which isn't something you'd see under Obamacare.
The MacArthur Amendment would also allow states that choose to apply for the essential health benefits waiver to determine what benefits are considered "essential." Fewer essential benefits means more affordable health plans from a premium perspective, but it can limit the lifetime out-of-pocket benefits that patients can receive. In other words, those with pre-existing conditions will likely pay more out-of-pocket, in addition to a potentially higher premium.
There's a lot left to be hashed out with the AHCA in the Senate, and it's very likely that the bill we have now won't look the same if it passes in the Senate. However, one thing is certain: people with pre-existing conditions can't be turned away. The big question we should be asking at this point is whether or not they can afford the coverage they're offered if the American Health Care Act passes.
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