Senate majority leader Mitch McConnell unveiled the Republican party's latest attempt to repeal and replace Obamacare on Thursday. Let's call it Trumpcare 3.0.
The proposal has some things in common with prior proposals, but there are substantial differences, too. Here are five details you need to know about the Senate's latest attempt to reform health insurance.
No. 1: Think "skinny"
Obamacare's minimum health insurance benefits were left in place in Trumpcare 1.0 (which passed the House and was later abandoned by the Senate) and Trumpcare 2.0, the Senate's first attempt at reform. However, to win over conservative Republicans, Trumpcare 1.0 and 2.0 included provisions that allow states to apply for waivers of these requirements so that insurers would have more flexibility to design and price their plans.
Trumpcare 3.0 goes one step further by allowing health insurers to sell stripped-down plans that cost less because they cover less.
Support for these so-called "skinny plans" has been championed by Ted Cruz, but widespread support of them has been tepid. The main concern is that skinny plans would remove healthy people from the insurance pools that are used in pricing plans that offer more comprehensive coverage, which could unintentionally drive up premiums for older and sicker Americans. It's unclear whether this provision will stay or go, but for now it's in.
No. 2: The tax man returneth
Previous Trumpcare plans rolled back taxes on the rich that were enacted under Obamacare, but Trumpcare 3.0 leaves these taxes in place.
Continuing to charge high-income Americans more in Medicare taxes and net investment income taxes is better for the federal budget, and it improves the optics of this plan in middle America, but it's likely to draw the ire of high-income Americans. As a refresher, these taxes apply to single filers with incomes north of $200,000 per year and couples with incomes higher than $250,000 per year.
No. 3: Medicaid expansion still goes bye-bye
Over 16 million Americans have enrolled in Medicaid since Obamacare went into effect, and in every version of Trumpcare (so far), Obamacare's Medicaid expansion, which drove that enrollment increase, would be rolled back through the removal of federal cost-sharing over time.
In Trumpcare 3.0, the phase-out period remains the same as in Trumpcare 2.0, and that means payments to states for Medicaid expansion would disappear by 2026.
No. 4: Live free or die
One of the biggest objections to Obamacare has been the mandate to buy insurance or face stiff penalties at tax time.
Unsurprisingly, all three versions of Trumpcare have removed this "shared responsibility payment," thereby allowing consumers to decide for themselves whether they want to buy insurance. This has raised worries that young, healthy Americans would drop their insurance coverage or never buy a policy in the first place, driving up insurers' costs and thereby raising premiums for Americans who need insurance most.
The Senate bill proposes a solution to this problem: American adults who go 63 days or more without health insurance would be locked out of getting coverage for at least six months. The jury is out on whether this would be more effective than the shared responsibility payment at prompting Americans to purchase health insurance.
No. 5: Subsidies stay, but they'll be less generous
Trumpcare 3.0 also mirrors how Trumpcare 2.0 would help lower-income Americans afford health insurance.
Health insurance credits are currently awarded to Americans earning up to 400% of the federal poverty level, but subsidies will only be given to Americans earning up to 350% of the federal poverty level under Trumpcare 3.0, and those subsidies will be adjusted by age and income. Also, the amount of the subsidy will be based on the cost of an insurance plan covering 58% of healthcare expenses. Under Obamacare, subsidies are based on the cost of a plan that covers 70% of healthcare expenses.
As with Trumpcare 1.0 and 2.0, the subsidies for co-payments and out-of-pocket expenses that are currently given to people earning up to 250% of the federal poverty level would be eliminated.
It's anyone's guess whether Trumpcare 3.0 will get enough votes in the Senate to pass. Trumpcare 2.0 was done in by conservative Republicans who said it didn't go far enough and moderate Republicans who were unhappy with cuts to Medicaid. It didn't help matters that the CBO estimated that 22 million Americans would lose their coverage if Trumpcare 2.0 became law, either. Trumpcare 3.0 could win over some senators, but because the Medicaid cuts remain, moderates may still vote "nay!"
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