It’s no secret that health insurance in the United States is a complex and contentious issue. Though Obamacare provided coverage for millions, some felt it brought higher premiums and unfair mandates.
On May 4, the House of Representatives passed the American Health Care Act (AHCA). The AHCA, also known as Trumpcare or H.R. 1628, updates the federal budget and repeals portions of Obamacare. The bill narrowly passed in the House with a 217 to 213 ratio.
The bill, which was passed without industry support, was backed by some prominent Republicans, while opponents argue it favors the wealthy and creates inequalities for individuals with lower incomes or pre-existing conditions.
The bill needs to pass muster with the Senate Parliamentarian in order to qualify for budget reconciliation, but the Senate has decided to issue a rewrite.
Here’s a breakdown of Trumpcare’s major changes:
Age and Pre-Existing Conditions
Under Obamacare, conditions like AIDS/HIV, multiple sclerosis, and bipolar disorder are covered as pre-existing conditions. Insurance companies cannot deny coverage to these individuals who require more medical treatments than those who are born healthy.
Obamacare protects people with pre-existing conditions by mandating that insurance companies cannot charge higher rates for their care. Pre-existing conditions include, but are not limited to:
- Alcohol Abuse
- Mental Illness
- Crohn’s disease
- Parkinson’s disease
- Pending Hospitalization
- Multiple Sclerosis
- Rheumatoid Arthritis
- Muscular Dystrophy
- Pneumocystis Pneumonia
- Sleep Apnea
- Cerebral Palsy
- Organ Transplant
- Congestive Heart Failure
- Heart Disease
- Bypass Surgery
- Hepatitis C
- Kidney Disease
- Renal Failure
The AHCA gives states the power to decide whether insurance companies can increase rates for individuals with pre-existing conditions. Though Republicans argue the bill will not allow companies to deny coverage outright, some individuals may be unable to afford coverage due to increased rates.
Polls conducted by Politico showed 50 percent of Americans disagreed with allowing states to opt-out of pre-existing coverage.
Additionally, the ACHA creates an age rating ratio that could lead to five times higher rates for elderly individuals. The ACA set the ratio at 3:1, meaning older people couldn’t be charged more than three times the standard rate.
Individual Mandates vs. Continuous Coverage
Obamacare’s individual mandate required all citizens to have health insurance or pay a fine. The fine, known as the individual shared responsibility payment, is paid when taxes are filed. The purpose of individual mandates is to provide a balance of healthy and sick individuals to offset market costs, creating affordable coverage for those with pre-existing conditions.
To provide the same level of balance, the AHCA offers continuous coverage as an alternative to individual mandates. If an insured individual has a lapse in coverage, the cost of insurance will increase by 30 percent each month.
There is no direct fine, and individuals who do not have a lapse in coverage cannot be charged more regardless of whether they have a pre-existing condition. Continuous coverage is a different way of requiring all citizens to carry a policy to provide balance to the market.
Obamacare required insurers to cover 10 essential health benefits to ensure that even lesser plans included a baseline coverage. The AHCA allows the states to decide whether they will require insurance carriers to cover the 10 essential health benefits, which include:
- Ambulatory patient services (outpatient services)
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services (those that help patients acquire, maintain, or improve skills necessary for daily functioning) and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
Taxes and Health Savings Accounts
Under Obamacare, individuals can file deductions for medical expenses if the costs are more than 10 percent of the adjusted gross income for the household. The AHCA allocates tax credits to individuals who need help with insurance. However, the credit is age-based, whereas it is income-based under Obamacare.
Trumpcare may allow individuals to include their health insurance premiums in their tax deductions. This portion of the repeal is controversial because it would only benefit a small portion of individuals if insurance is lost regardless.
Health Savings Accounts, or HSAs, are medical savings accounts that are not taxed by the government. Individuals have the option to use HSAs under Obamacare, but most people don’t because they require high-deductible health plans and significant funding. Health Savings Accounts would benefit higher-income individuals.
Medicaid systems utilize open-matching to allocate funding, which allows the government to guarantee federal contributions for every $1 spent by states. Trump has rolled back the Medicaid expansion offered by Obamacare, which means that fewer people will qualify for Medicaid assistance.
Americans pay the highest price for prescription drugs. The AHCA may allow individuals to order prescription drugs from other countries. Obamacare doesn’t focus on foreign prescription allowances.
The AHCA bill is part of a budget reconciliation, meaning that Senators cannot initiate a filibuster. It could pass with a majority vote, though Senators have publicly stated they plan to rewrite the bill. The first portion of the bill was released on March 6, with the mention of three additional phases to complete the repeal.
According to the Congressional Budget Office, 23 million Americans would lose insurance if the AHCA is put into place.
A group of 10 patient advocacy organizations, including American Cancer Society Cancer Action Network, the American Heart Association, and the American Lung Association made the following statement, “The various patchwork solutions offered by lawmakers would still leave the millions of patients we represent, who have serious and chronic health conditions, at risk of not being able to access life-saving treatments and care.”
Additional advocacy groups include the American Diabetes Association, the Cystic Fibrosis Foundation, March of Dimes, the National Organization for Rare Disorders, the National MS Society, and WomenHeart: The National Coalition for Women with Heart Disease.