As the American Health Care Act (AHCA) works its way through Congress, it will almost certainly undergo revisions in order to come up with enough votes to pass in the Senate. However, it's important to understand the AHCA as it stands now because some of its current provisions may survive the final version of the bill and become law.
Repeal of the individual mandate
The individual mandate is the ACA requirement that every American must have health insurance or pay a tax penalty. Republicans have been strongly opposed to the individual mandate from the beginning, and not surprisingly, repealing it has been a high-priority part of the AHCA.
Repeal of the net investment income tax (NIIT)
The NIIT is a tax on investment income for taxpayers with modified adjusted gross income above $250,000 (for married filing jointly) or $125,000 (for single filers). This tax is used to fund the ACA subsidies and Medicaid expansion; getting rid of it has been another high priority for Republicans. The AHCA also repeals several smaller taxes that are used to fund the ACA.
States can waive insurance carrier requirements
The AHCA gives states the ability to waive certain requirements for health insurance plans located in that state. First, states can change the requirement that health insurance plans charge seniors premiums no more than three times greater than the premiums charged to younger enrollees. The AHCA recommends that states choose a 5-to-1 requirement instead.
Second, states can allow health insurance plans to skip coverage for "essential health benefits" such as prenatal care, preventative care, and mental health benefits.
Third, states can allow carriers to deny coverage or charge higher premiums for people with pre-existing conditions such as diabetes and cancer. States that choose to apply that last waiver will be required to offer another way for affected enrollees to get healthcare; the AHCA provides up to $138 billion over 10 years to fund these high-risk pools.
Change to premium tax credits
The current premium tax credit is based on taxpayers' income, family size, location, age, and cost of available insurance plans. It's also need-based and limited to taxpayers with income of no more than 400% of the federal poverty line (approximately $50,000 of annual income, for single filers).
The AHCA replaces this credit with a new tax credit that's based on age and income level only. The new credit is a flat amount between $2,000 and $4,000, depending on the taxpayer's age (older taxpayers are eligible for higher credits). It has income limits, but they're much higher than the limits for the existing tax credit.
Reductions to Medicaid
The AHCA repeals the expanded eligibility limits for Medicaid that the ACA implemented, by gradually rolling back these eligibility limits beginning in 2019. It also converts Medicaid from an entitlement program (meaning that the federal government will provide benefits to anyone who qualifies for the program) to a grant program (meaning that the federal government will pay states a certain amount and the states will then pass that money on to enrollees).
What to expect in the near future
The Republicans hold a slim majority in the Senate of 52 to 48, and they'll need at least a majority vote to pass the bill under budget reconciliation guidelines. Since several Republican senators have expressed concerns with the AHCA in its current form, the bill will likely go through some major changes in order to ensure a successful vote.
If the AHCA passes the Senate in its revised form, the House and the Senate will need to come up with a way to reconcile the two different forms of the AHCA bill in order to officially pass it and send it to President Trump for his approval. All in all, it will probably take quite a while for the AHCA to complete its voyage through Congress -- and if it does, the final version may be very different from today's AHCA.
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