On Monday, House leaders released legislation to replace the Affordable Care Act. If it passes, here's what would change.
Who would be covered
Under two plans drafted by separate House committees, the government would no longer penalize Americans for failing to have health insurance.
OUT: Enforcement of the individual mandate requiring coverage.
OUT: Employer mandate on larger companies to offer affordable coverage.
IN: 30 percent surcharge on premiums that insurers would be able to impose on consumers who purchase a new plan after letting their previous coverage lapse – a strategy to encourage people to remain insured.
How they would pay for coverage
The plans would replace federal insurance subsidies with a new form of annual individual tax credits.
OUT: Income-based premium subsidies to lower- and moderate-income consumers would end as of 2020.
IN: Age- and income-based refundable tax credits.
How the new tax credits would work
The new legislation would break people into five age groups, each receiving a different amount in tax credits to purchase health insurance:
Age: Tax credit
20-29: $2,000
30-39: $2,500
40-49: $3,000
50-59: $3,500
60 and older: $4,000
These credits begin to phase out for individuals making more than $75,000 and joint filers making over $150,000. Other restrictions include:
– For each $1,000 in additional income above the limits, a person would be entitled to $100 less in credit.
– Credits would be limited to a maximum $14,000 per family.
– Credits could be used for any health plan allowed in a state, including ones providing only catastrophic coverage.
– Credits could not be used to buy health plans that cover abortion.
OUT: Insurers can charge older customers up to three times what they charge younger customers.
IN: Insurers would be able to charge older customers up to five times what they charge younger customers.
OUT: Individuals can contribute up to $3,400 and families up to $6,750 to pre-tax health savings accounts.
IN: Starting in 2018, individuals could contribute up to $6,550 and families could contribute up to $13,100 to pre-tax health savings accounts.
OUT: Cost-sharing subsidies, which were provided to insurers to help their ACA customers cover deductibles and co-payments (ending in 2020).
IN: States would receive $100 billion over 10 years through a new Patient and State Stability Fund for safety-net needs and possible "high-risk pools" for consumers with expensive medical conditions.
Proposed changes to Medicaid
Here's how the legislation would address Medicaid.
OUT: Medicaid as an entitlement program with open-ended, matching federal funds for anyone who qualifies.
IN: Medicaid would be funded by giving states a per-capita amount based on how much each state was spending for the fiscal year that ended in September.
How Medicaid expansion would be affected
Under Obamacare, 31 states broadened their Medicaid programs to cover people making up to 138 percent of poverty-level income.
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Under the GOP plans, the states would continue getting enhanced federal funding until 2020. After that, the government would keep paying 90 percent for beneficiaries already on the rolls as long as they remain eligible.
After 2020, new beneficiaries would be funded at a lower level.
Other key elements of the plans
The legislation would preserve some of the most popular features of the 2010 health-care law, while targeting Planned Parenthood.
IN: Insurers would still be banned from denying coverage based on preexisting conditions.
IN: Dependents would still be able to stay on parents' insurance plans until age 26.
IN: Caps on annual or lifetime coverage would still be banned.
IN: Insurers would still have to cover certain categories of specified benefits first covered by the ACA.
OUT: Planned Parenthood is eligible for Medicaid reimbursements or federal family-planning grants (but federal money cannot fund abortions).
IN: Planned Parenthood would face a one-year funding freeze.
Source: The American Health Care Act, House Republican briefing.