Draft legislation of the American Health Care Act was introduced Monday. This is the possible replacement for the Affordable Care Act, known as ObamaCare.
Following are the highlights of the bill which will now be debated in Congress.
- Removes the mandate that all citizens must purchase health insurance
- Eliminates the penalty for not purchasing insurance
- Doubles the annual cap on tax free money put into a Health Savings Account – Currently $3,400 Indiv/$6,750 Family
- For businesses, many of the ACA taxes and requirements would be eliminated
- Removes requirement that employers with over 50 employees provide coverage
- More flexibility to the states to develop effective solutions
- Eliminates taxes on insurers and drug companies
- Children can stay on parents plan until age 26
- Keep pre-existing conditions provision barring insurers from denying coverage
- Those dropping coverage would face a 30% penalty when re-purchasing insurance if un-insured for more than 63 days
- Young people who age out of their parents plan and do not sign up for their own insurance will pay the 30% penalty
- Beginning in 2019 there will be a 12 month look back period to determine if the applicant went without coverage for longer than 63 days
- Allows insurers to charge their oldest customers up to 5 times what they charge young adults
- Subsidies based on income are eliminated
- Tax credits based on age will be implemented – Ranging from $2,000 per year for people under 30, increasing to $4,000 per year for those over 60
- The size of a tax credit would grow with the size of a family and be capped at $14,000, and could be used to purchase any plan offered, including “catastrophic” coverage
- Tax credits would phase out at higher income levels; for individuals $75,000 or households making more than $75,000
Medicaid
- Maintains higher federal financing for Medicaid through the end of 2019.
- After 2020 states would no longer receive an open-ended federal match on the amount they spend on newly enrolled Medicaid beneficiaries
- States would receive a set amount based on their Medicaid population beginning in 2020
- States would receive $2 billion in grants over a 10 year window to use however they choose to lower health care costs
High risk pools, run by the states, are being discussed as a way of separating the healthy from those with pre-existing conditions. This will drive premiums down. The insurance pools would be subsidized by the federal government and the states. Currently, medical losses are covered by those that are healthy and don’t require extensive medical care. That is why premium costs of the Affordable Care Act are so high.
In addition, Lawsuit Abuse Reform and Purchasing Insurance Across State Lines will be included in discussions.
Keeping you informed!
Allan is the founder of Argeus Benefits Group, an Arizona based health insurance firm that helps individuals, employers and Medicare beneficiaries save money on health insurance and structure a program that best fits their particular situation and is compliant with the Affordable Care Act. For more info, go to argeusgroup.com.
