Where you live already has a profound effect on your health insurance options. A plan that's available in one area may not be available in another, or may have different options or different rates. Yet your state of residence could have an even greater effect on your healthcare expenses once the American Health Care Act, aka Trumpcare, passes through Congress and becomes law. In its current form, the bill gives states the right to set or waive several crucial requirements for health insurance plans.

Essential health benefits

The Affordable Care Act (Obamacare) requires all health insurance plans to include coverage for 10 "essential health benefits." Essential health benefits include maternity and newborn care, emergency services, prescription drug coverage, mental health coverage, and laboratory services, among others. Under the current Trumpcare package, individual states will be able to waive essential health coverage requirements for the insurance plans in that state. It's not clear at this time whether the waiver will automatically include all 10 essential health benefits, or whether states will be able to pick and choose which benefits are waived.

Stethoscope and money

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Insurance rates for seniors

The ACA mandates that health insurance plans must charge seniors no more than three times what they charge younger enrollees. The Trumpcare bill allows states to waive this requirement and set whatever maximum they choose for senior health insurance premiums. The bill recommends that states set the maximum for senior premiums at five times the rate for younger enrollees. AARP estimates that seniors would have to pay an additional $3,000 per year in health insurance premiums in states that choose a 5 to 1 requirement.

Deny coverage for pre-existing conditions

Under the current Trumpcare bill, states will be able to waive the requirement that insurance companies accept enrollees with pre-existing conditions. In states that choose to implement this waiver, health insurance plans can either deny coverage entirely or charge significantly higher premiums for pre-existing conditions such as diabetes or cancer. Any state that offers insurance providers this waiver must also implement a "high risk pool" to fund healthcare for patients who can't get coverage as a result. The federal government will provide as much as $138 billion to fund these high-risk pools; however, a recent study finds that this amount will only provide enough coverage to fund around 600,000 patients across the country. estimates that about 40% of seniors have one or more pre-existing conditions, a total of 25 million people -- so the proposed funding for these pools clearly wouldn't begin to cover all affected patients.

What to expect next

The Trumpcare bill will undoubtedly undergo quite a few changes as it works its way through Congress. Some of the state waiver options in the current bill may either disappear entirely or be limited in various ways. The waivers that survive after the bill becomes law will have a significant impact on healthcare expenses for residents of states that choose to implement those waivers. Worse, if some states implements waivers and others don't, health insurance providers may simply stop offering plans or limit their offerings in the states that don't have waivers. It remains to be seen if the final version of the bill will address such a possibility. In a worst-case scenario, someone with a pre-existing condition or other healthcare issue may be forced to move to a different state in order to get health coverage.

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