Last post I gave you five myths that are being promoted by opponents of repealing and replacing ObamaCare. (Five Myths About the New AHCA) Today I want to give you some facts about the bill so you’ll know what is the truth.
The American Health Care Act
Anyone can read the bill for themselves. You simply go to Congress.gov and look for the bill (H.R. 1628 – the American Health Care Act). If you don’t like reading complicated legal documents, a simpler summary of the bill can be found on Congressman Dan Webster’s website (Webster.house.gov.) From these two sites I learned the following truths about the bill:
- Guaranteed issue – no one can be denied coverage due to pre-existing medical conditions. Those who maintain coverage continuously will be charged the same. Those who drop their coverage for over two months (62 days) will still be covered when they re-enroll but must pay a 30% premium increase for the first year. This is to discourage the practice of dropping coverage when you’re well and re-enrolling when you’re sick. That practice, common under ObamaCare, forces insurers to charge everyone more than necessary. This change will lower premiums for everyone.
- Establishes a “Patient and State Stability Fund” to fund high-risk pools – Funds these pools with $138 Billion to make certain no one will be denied coverage because of expensive pre-existing conditions – nor will they have to pay the actual full cost of their premiums.
- Doubles amounts that can be contributed to HSAs – tax-free contributions to Health Savings Accounts to pay healthcare expenses will be double. This incentivizes people to spend their healthcare dollars carefully for they can benefit from the savings. It also permits use of HSAs for OTC medications.
- Increases insurance premium price levels from three to five. Before ObamaCare, insurers used six levels of premium pricing to fairly price the risk of coverage; cheaper for the young and healthy and more expensive for older and sicker patients. ObamaCare forced them to use only three levels which meant the young and healthy paid more than necessary for their risk and the older and sicker paid less than the actual cost. With five levels the pricing will return to fairer levels that reflect the actual cost of coverage. This will encourage more young and healthy people to enroll. States may pre-empt this provision if they choose.
- Gives states flexibility to convert Medicaid programs to block grants – allows the states to establish work-requirements and design their own programs that will enhance quality and lower costs.
- Restricts the Medicaid expansion to current levels – it establishes spending caps for Medicaid to halt the runaway explosion of this entitlement under ObamaCare.
- Defunds Planned Parenthood – for one year. This provision prevents federal funds from being used to provide abortions. The same money is spent on increasing funding of community health centers.
- Lowers costs for small businesses – seeking to provide health insurance for their employees.
- Allows dependents up to age 26 to stay on their parents’ insurance plan
- Eliminates the Individual and Employer Mandates – no individual or employer can be penalized for failure to have healthcare insurance. This will lower taxes for individuals and eliminate the ObamaCare provisions that are keeping employers from hiring or forcing full-time employees into part-time jobs. It should allow employers to raise wages instead of spending more on providing health insurance.
- Eliminates the medical device tax – this will stimulate innovation
- Repeals ObamaCare subsidies beginning 2020
- Reduces qualifying income threshold from 10 percent to 5.8 percent –which is lower than the pre-ObamaCare level. This will allow more people to take deductions for medical expenses on their income tax return.
- Subjects health insurers to same laws which prohibit unfair trade practices – price fixing, collusion, or market allocations that harm consumers.
- Repeals certain consumer taxes – taxes on investment (3.8%), tanning salons, fees on pharmaceuticals and the Medicare tax on certain employees and self-employed individuals with wages above certain thresholds.
These are the facts about the bill taken directly from the bill itself. Next post I will try to bring some clarity to the bill with more analysis.