Major innovations of the American Health Care Act

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Members of the Republican Party in the House of Representatives have proposed a replacement for the Affordable Care Act (ACA), known as Obamacare. How does their American Health Care Act differ from its predecessor? Below we offer a brief analysis of the main points from USA Today.

Does it have to have insurance or pay tax?

Not. The law repeals the tax penalties prescribed by Obamacare for citizens without insurance, as well as employers with more than 50 full-time employees who do not offer their employees health insurance for all months after December 31 2015. However, if this law is not adopted in the near future, the above penalties will still be applied when filling out tax returns for 2016 a year.

Should insurance companies offer coverage regardless of the conditions already in place?

Yes, but for the lack of permanent coverage fines are charged. Both health laws prescribe that insurers cannot deny insurance to a person, depending on their health condition. However, the Republicans plan provides that they can charge 30% premiums for the first year, regardless of health status, from those who are just starting to insure and have not had continuous coverage before. This increase allegedly covers the absence of insurance for 63 days or more in previous 12 months.

What will happen with the expansion of the program Medicaid?

It is eliminated.

Even before Obamacare, the Medicaid program was provided to such groups: low-income families, pregnant women, children, and people with disabilities. According to Obamacare, all citizens up to 65 years, whose income does not exceed 138% of the federal subsistence minimum (approximately $ 16 643 per person per year), also began to fall under it, but only in those states that agreed to the expansion. This is 31 state and DC. Expansion of the program provides, so far, an increase in federal funding. More than 11 of millions of adult Americans joined the Medicaid program before March 2016, according to research companies.

According to the Republican bill, the expansion of the Medicaid program will become impossible after December 31 2019. Those states that can still be joined after this date will not be able to do this.

To dot the i, you need to say that the Medicaid plan will continue to cover everyone who joins it before 2020. But if there is a break in the coverage for at least a month after 31 in December of 2019, then it will be impossible to go back to the plan (unless the state itself agrees to incur the relevant costs).

The Republican plan includes another major Medicaid change. It sets the top amount of federal funding that the state can receive for each Medicaid member. The amount will vary depending on the categories (children, blind, people with disabilities). Today, the federal government promises states full cost recovery for Medicaid, regardless of the cost.

Will insurers be required to cover specific categories of health insurance?

Yes. The new law leaves in force the requirements for the main categories of insurance, prescribed in Obamacare. Insurance companies will be required to cover 10 medical services, including those related to pregnancy and childbirth, prescription drugs and mental health care. After 31 December 2019, this requirement will not apply to state Medicaid plans.

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Will there be subsidies for citizens to buy insurance policies? What is the difference from the ACA law?

ASA provides two forms of financial assistance: a tax credit for the insurance premium (according to the Republican plan, it will change) and cost-sharing to reduce direct costs (they are planned to be canceled).

First consider the tax credits for the insurance premium. Such loans will be available to individuals who buy insurance on the so-called “non-group” market themselves. But instead of a sliding scale depending on income (as in Obamacare), the Republicans plan envisages that the loan will depend on age — the older the person, the bigger the credit. (At the same time, this plan allows insurance companies to charge up to 5 times more money from older Americans compared to younger ones. We’ll say this below).

According to the ACA plan, the cost of insurance in a particular area of ​​residence is also taken into account when calculating a tax credit. The loan amount varies in such a way as to establish a certain “ceiling”, how much a person or 1 person will spend on insurance. In terms of Republicans, this is not.

Instead, the new plan sets an income limit to determine the tax credit. Those earning up to $75 (or $150 for a married couple; this is adjusted gross income) will receive the same, fixed amounts for their age. The credit amount starts from $2 thousand per year for the group up to 30 years old, and increases in increments of $500 for every 10 years of age, up to $4 thousand per year for people over 60. The “ceiling” of the tax credit for a family will be $14 thousand. The 5 oldest family members will be taken into account for the calculation. This new counting scheme will begin to apply in 2020, and some changes will be made in 2018 and 2019 with the aim of giving more to young people and less to older people.

For those who earn more than the established income limit, tax credit is reduced by 10% of the amount earned above the limit. For example, an American aged 60 years or older with an income of $ 100 thousand per year will receive a tax credit of $ 1,5 thousand ($ 4 thousand minus 10% of $ 25 thousand).

The same hypothetical 60-year-old American according to the ACA plan does not receive any tax credits. But if he earns $ 30 thousand a year, then according to the ACA he owes more than the Republicans plan. For example, in the district of Franklin, Ohio, the tax credit will be $ 6 550 in 2020 according to the ASA plan and $ 4 thousand according to the Republican plan. Compare the amount of tax credits for both plans in different districts of the states of America can using this interactive mapcreated by the Kaiser Family Foundation.

As for the cost-sharing subsidies that are currently available under the ACA plan (they help reduce the direct costs of insurance premiums and other costs for those who earn from 100% to 250% of the federal minimum living wage), they will be abolished in 2020 year . On the other hand, the Republican plan establishes a $ 100 billion patient stabilization fund for 9 years. Money from this fund can be used for various purposes, including to reduce the direct costs for residents of the state.

Tax credits for small businesses will cease to exist in 2020. The “exchanges” of medical insurance will remain, but tax credits can be used for plans that are sold outside of these exchanges. Also, different levels of plans will be canceled (bronze, silver) depending on the actuarial value (percentage of covered costs). Natural disaster insurance can buy anyone, not just people under the age of 30 years, as in the case of ASA.

What does the law say about medical savings accounts (MCC)?

It raises the insurance premium limit for non-taxable accounts from the current $ 3 400 for individual citizens / $ 6 750 for families to $ 6 550 and $ 13 000, respectively.

Excess money from the tax credit for the insurance premium can also be paid, they will not be considered as part of this limit. This will allow people to use money from MCC for OTC drugs. The ASA plan restricted the use of these drugs only to non-prescription medications for which the doctor wrote a prescription.

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Under the terms of the ASA plan, there were so-called winners and losers in the market for individual insurance. Will the situation change with the new law?

Both laws, acting and proposed by Republicans, primarily concern the market for individual insurance. 7% of the US population buy their own insurance. The impact of the ASA plan on such people depended on the personal conditions of each. The same can be said about the Republican plan. In general terms, the ASA Act limited the variation in insurance premiums, depending on health status and age. Thanks to this, older people with worse health status paid less than before, while young and healthy people paid more.

Republican plan allows you to vary the price depending on age. Insurance companies can charge up to 5 times larger sums of older people compared to young people. Each state can change this coefficient itself. Under the ACA law, he was 3: 1. Therefore, young people will pay lower insurance premiums under the new law, and older people will pay higher ones.

Older Americans will receive more tax credits according to the Republican plan than younger citizens. In terms of ACA, a tax credit depends on other personal circumstances, such as income and local insurance cost. Low-income citizens will feel worse with the Republican plan, and those who earned too much for an ASA tax credit (income above $ 48 240) will receive tax credits with the new law.

Look interactive map from the Kaiser Family Foundation - it shows how tax credits change, depending on the circumstances. “In general, older people with low incomes, or those who live in states with high insurance premiums (Alaska, Arizona), receive more tax credits under the ASA plan than the Republican plan suggests. In contrast, people who are younger, with higher incomes, or those who live in states with low insurance premiums (Massachusetts, New Hampshire, Washington) will receive more help under the new plan, ”say the organization.

What kind of ASA taxes will be canceled according to the Republican plan?

Many taxes on the ACA plan will be abolished.

As already mentioned, the law abolishes all fines for those who do not have insurance, as well as for large employers who do not offer it. Also, for 2018, for high-income taxpayers, the law abolishes 3,8% tax on net investment income and additional 0,9% Medicare tax on income above the threshold. In the same year, the law will abolish the 2,3% tax on the sale of certain medical products and the 10% tax on tanning services. Annual fees for companies that provide insurance services for risk factors in the US, as well as fees for companies that manufacture or import branded prescription drugs, will be canceled.

The law provides for a reduction in the tax on income from medical savings accounts (MCC) not used for appropriate medical expenses from 20% to 10%, as well as a tax on such income from MCC Archer from 20% to 15%. It reduces the threshold for receiving a tax rebate on medical expenses from 10% to 7,5% adjusted gross income. And from 2020 to 2024, according to the law, the so-called “Cadillac tax” will be abolished - 40% excise tax on expensive insurance plans offered by employers.

Will young people be able to continue to use their parents' medical plans until the 26 age?

Yes, the new law does not touch this provision of the ASA plan.

Photo: depositphotos.com

How does the new law relate to abortion?

For a year, he freezes state funding for payments to “forbidden organizations” - those that, among other things, have abortions, except in connection with rape, incest or a risk to the health of the mother. This includes funding for the American Federation of Family Planning (Planned Parenthood) under the Medicaid plan, which makes up most of the budget funding for this organization. According to today's law, the Federation has no right to use budget money for abortions, except in cases of violence, incest or risk to the life of the mother.

In addition, the Republican plan does not allow the use of a tax credit to buy insurance that covers an abortion, except for those three exceptions. Insurance companies will still be able to sell “separate coverage” for paying for abortions, and patients will be able to buy them independently.

How many Americans will have insurance compared to the ACA plan?

There are no concrete figures from Congress yet, but analysis by S&P Global Ratings shows that the number of insured will drop by 6-10 million people.

How much will this law cost in comparison with ASA?

This information is also not yet, you need to wait for the analysis of the bill by the Congress Committee.

Where can I find out more about this bill?

Full English text have this link.

See also:

Personal experience. How we treated a child in the USA

Personal experience: Russian woman on the work of children's doctors in the United States

Personal experience. How to cheaply cure your teeth in the USA

Survive without insurance: how to get medical care in the US and avoid huge accountsв

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