The Republicans have introduced their bill to modify the Affordable Care Act (ACA), more commonly known as Obamacare. The Republican bill, The American Health Care Act (AHCA), makes health care more expensive for sick, chronically ill and lower-income individuals while giving tax breaks to the wealthy.

The AHCA is summarized here by Physicians for a National Health Program. The key points from the PNHP summary with some added comments are shown below:

  • Continue to channel billions of taxpayer dollars through wasteful private insurers.
  • Sharply reduce the ACA’s subsidies (or “tax credits”) available to lower-income persons, particularly older adults, to purchase coverage.
  • End the ACA’s cost-sharing subsidies for copayments and deductibles, increasing the cost of care for those with chronic medical conditions.
  • Replace the ACA’s “individual mandate” penalty on the uninsured with a 30 percent surcharge on insurance premiums for those who experienced a lapse in insurance coverage
  • Slash federal funding for the Medicaid expansion beginning in 2020, and move towards a “per capita” cap on Medicaid spending that would squeeze state Medicaid budgets and push millions of enrollees out of the program. Currently, Medicaid provides funding on per enrollee basis. The ACHA would provide funding on a per capita basis based on population. The funding would increase based on a general inflation rate, but not based on medical inflation. Since medical inflation usually rises faster than the general inflation rate, the per capita funding will decrease over time.
  • Increase the tax-favored status of Health Savings Accounts, which mostly benefit people in high income brackets.
  • Reduce taxes on pharmaceutical, medical device and health insurance companies.
  • Offer tax reductions totaling $274.6 billion over 10 years to the wealthiest 2 percent of Americans.

 

A more detailed summary can be found here and is reprinted below.

Summary of Republican Congressional Health Reform Proposal Released 3/6/2017
Steffie Woolhandler, M.D., M.P.H., & David Himmelstein, M.D.

Most ACA insurance regulations unchanged (probably can’t be changed through
reconciliation)

  • Cover preexisting conditions
  • No health status underwriting
  • Meet actuarial value requirements
  • Cover adult children up to age 26
  • Cap out-of-pocket expenditures
  • No lifetime or annual limits
  • 10 essential benefits

Medicaid – Cuts in Federal payments estimated at $370 billion/10 years

  • Ends ACA expansion and essential health benefit requirements 1/1/2020
  • Replaces Federal Medicaid match with per-enrollee funding 1/1/20. Full funding for
    those continually enrolled since 1/1/2020; reduces funding for new enrollees or reenrollees
    by one third.
  • Federal payments to the states through Medicaid or any other program for Planned
    Parenthood would be prohibited

Insurance Regulation and Continuous Coverage Requirement

  • Replaces mandate with continuous coverage requirement for individual/small group
    plans: Premiums increased by 30 percent for those with a gap in creditable coverage of
    at least 63 continuous days during the preceding 12 months (or, for people leaving
    dependent coverage, who did not enroll during the first available open enrollment
    period).
  • Allows premiums to vary by a 5:1 ratio for old:young (vs. 3:1 under the ACA)

Coverage subsidies (tax credits)

  • Replace ACA subsidies with age-adjusted, fixed-dollar advanceable tax credit. Phased
    out for individuals with income > $75,000 (families > $150,000)

    * $2,000 for individuals under 30;
    * $2,500 for those ages 30 to 40;
    * $3,000 for those ages 40 to 50;
    * $3,500 for those ages 50 to 60; and
    * $4,000 for those over 60 (<1/3 of the average cost of coverage for this age group)

  • Tax credits would only be available for individuals not eligible for employer coverage
  • Most non-citizens ineligible for tax credits
  • Prohibit using subsidies for any plan that covers abortions

Taxes repealed & new cuts (amounts in parentheses are amounts lost to treasury over 10
years)

  • Medicare tax on unearned income for wealthiest 2% of taxpayers ($157.6 billion).
  • Medicare surtax on high incomes >$200,000 ($117 billion)
  • Tax on prescription drug firms ($24.8 billion).
  • Tax on medical device firms ($19.6 billion).
  • Tax on health insurers ($144.7 billion).
  • Tax on health insurer executive compensation exceeding $500k ($400 million)
  • Others: Tanning tax ($600 million);.med. expense deductions ($34.9 billion); FSAs
    ($18.6 billion); HSAs ($24.1 billion);
  • Delays Cadillac tax

Other Provisions

  • Cuts $1 billion from Prevention and Public Health Fund (i.e. CDC and public health
    departments).
  • $100 billion in new funds for states to establish high risk pools etc.