The legislation, titled the American Health Care Act, now
moves to the Senate, where it will likely change a lot when or if it lands on
President Trump's desk. But it's already possible to identify who will get
helped and who will get hurt by the bill.
The legislation calls for providing refundable tax credits
based on a person's age and income. It allows states to waive some protections
for those with pre-existing conditions, while letting insurers charge higher
rates to older consumers and levy a 30% surcharge on the premiums of those who
let their coverage lapse.
The bill also eliminates the enhanced federal match for
Medicaid expansion starting in 2020 and curtails federal support for the entire
Medicaid program, which covers about one in five Americans. And it lifts the
taxes that Obamacare had imposed on the wealthy, insurers and companies.
Republican lawmakers and supporters say the bill will lower
premiums and deductibles and give consumers more control over their health
care. But an array of opponents, including many consumer and patient advocacy
groups, say this bill could leave millions facing higher health care bills and
less coverage.
Here's whom the American Health Care Act would likely help:
Younger Americans could get cheaper plans
Obamacare was designed so that younger policyholders would
help subsidize older ones. That would change under the Republican bill because
it would allow insurers to charge older folks more. This means that younger Americans would likely see their
annual premiums go down. Enrollees ages 20 to 29 would save about $700 to
$4,000 a year, on average, according to a study by the Milliman actuarial firm
on behalf of the AARP Public Policy Institute.
Those under age 30 would also get a refundable tax credit of up to
$2,000 to offset the cost of their premiums, as long as their income doesn't
exceed $215,000 for an individual.
The GOP tax credits would also likely be more generous than
Obamacare's subsidies for these folks. For example, a 27-year-old making
$40,000 a year would receive $2,000 under the GOP plan, but only gets a $103
subsidy from Obamacare, on average, a Kaiser analysis found.
Also, the bill keeps the Obamacare provision that lets young
adults up to age 26 stay on their parents' insurance plan.
The healthy could buy less expensive policies in some states
Obamacare requires insurers to provide an array of health care
benefits, including maternity, mental health, prescription drugs and substance
abuse. This comprehensive coverage, however, jacks up premiums and provides
services that some consumers find unnecessary -- think, a couple in their late
50s who aren't having any more kids likely don't need maternity coverage.
The bill would allow states to waive this federal mandate,
which would allow insurers to offer skinnier plans that offer fewer benefits
with lower premiums.
Middle class and higher-income Americans could get tax
breaks and perks
The Republicans would enable people higher on the income
scale to claim the tax credit to help pay their premiums. Under Obamacare, an
enrollee who makes more than $47,500 is no longer eligible for a premium
subsidy. The GOP plan would let a policyholder making up to $75,000 claim the
full tax credit. The benefit would phase out slowly until the enrollee hits
$215,000 in income.
The legislation also would eliminate two taxes that
Obamacare levied on the wealthy to help pay for the law. Under the Affordable
Care Act, single taxpayers with incomes above $200,000 and couples making more
than $250,000 annually have to pay an additional 0.9% Medicare payroll tax on
the amount they earn above these thresholds. These taxpayers may also be hit
with a tax surcharge of 3.8% on investment income above those thresholds.
And the bill would allow folks to contribute more to Health
Savings Accounts, which are primarily used by better-off Americans who can
afford to sock money away for health care expenses.
Here's whom the American Health Care Act would likely hurt:
Lower-income folks could be left uninsured
Obamacare contains many provisions to help poor and
lower-income Americans.
Primarily, it expanded Medicaid to cover adults who earn up
to $16,400 a year. The American Health Care Act would end the enhanced federal
Medicaid funding for new enrollees starting in 2020. And it would curtail
federal support for the entire program by sending a fixed amount of money per
enrollee or by providing a block grant. States would likely have to either
reduce eligibility, curtail benefits or cut provider payments. All this could hurt not only poor adults, but
also low-income children, women, senior citizens and the disabled. Also, Obamacare provides those with incomes
just under $30,000 with generous subsidies to lower their deductibles and
out-of-pocket costs in individual market policies. The legislation would
eliminate the subsidies. Finally, the
premium tax credits the legislation would provide would not go as far
Obamacare's subsidies for lower-income consumers
Folks making $20,000 a year would take the biggest hit at
any age under the GOP plan, a Kaiser study found. A 27-year-old earning this
amount would only get $2,000, instead of $3,225 under Obamacare, on average.
Meanwhile, a 40-year-old would get $3,000 versus nearly $4,150. However, the
biggest loser would be a 60-year-old, who would receive only $4,000, instead of
nearly $9,900 under Obamacare.
In its review of an early version of the bill, the
non-partisan Congressional Budget Office estimated that 24 million fewer people
would have coverage by 2026 as compared to current law. The majority of those
would have qualified for Medicaid under Obamacare.
Major health insurance lobbying groups are concerned about
the bill's impact on all these folks, many of whom are their customers.
"The American Health Care Act needs important
improvements to better protect low- and moderate-income families who rely on
Medicaid or buy their own coverage," Marilyn Tavenner, CEO of America's
Health Insurance Plans, said after the bill passed the House Thursday.
Older Americans could have to pay more
Enrollees in their 50s and early 60s benefited from
Obamacare because insurers could only charge them three times more than younger
policyholders. The bill would widen that band to five-to-one. That would mean that adults ages 60 to 64 would see their
annual premiums soar 22% to nearly $18,000, according to the Milliman study for
the AARP. Those in their 50s would be hit with a 13% increase and pay an annual
premium of $12,800. Also, the GOP bill
doesn't provide them with as generous tax credits as Obamacare. A 60-year-old
making $40,000 would get only $4,000 from the Republican plan, instead of an
average subsidy of $6,750 from the Affordable Care Act, according the Kaiser
study. States could also receive waivers
to allow insurers to charge older Americans even more than five times the
premiums of the young.
Those with pre-existing conditions could be charged more and
get less coverage
States could allow insurers to charge higher premiums to
those with pre-existing conditions who let their coverage lapse. These states
would have to set up high-risk pools or other programs to help lower the costs
of insuring these folks, but many experts say the $138 billion set aside
through 2026 for that funding would not be enough.
Consumers with health issues may also find that their
policies don't cover all of their needs. That's because states could allow
insurers to offer skimpier plans. It's likely many carriers would take them up
on that offer since few would want to sell policies that attract the sickest
and costliest patients.
CNNMoney (New York)
First published May 4, 2017: 9:10 PM ET
