House Republicans unveiled their long-awaited replacement plan for the Affordable Care Act Monday night. They're calling it the American Health Care Act.
Like the Affordable Care Act, it relies on tax credits to help with the cost of health insurance. But the proposed value of the credits is considerably lower than with the current law. The Republican plan may result in fewer low-income people getting help to pay for their care.
The proposed overhaul also gets rid of one of the most unpopular features of the Affordable Care Act — the tax penalty for not having health insurance. In fact, if the Republicans' bill becomes law, people who didn't have insurance last year would not be liable for a penalty when they file their 2016 taxes this year.
The GOP plan also retains many of the features the public likes in the Affordable Care Act, like protections for people with existing health conditions. Here are seven provisions to look out for as the congressional debate unfolds over the next few weeks and months:
- Yes, you can stay on your parents' insurance until you're 26. The bill keeps this popular provision from the current law, which has been credited with helping an estimated 2.3 million young adults stay covered, according to Sara Schultz of Young Invincibles, a group that advocates for millennials in health care reform.
- Big penalties for on-again, off-again coverage. Schultz points out that millennials may be disproportionately affected by the proposed 30 percent penalty that insurers could charge for lapses in coverage under the House GOP bill. Millennials "are more likely to move, change jobs, or lack the resources to handle financial hardships that may lead to lapses in coverage," she says in a press release.
- Existing conditions cannot disqualify you for insurance. Republicans kept this popular provision, but a potentially volatile insurance market could change this, says Larry Levitt, a senior vice president of the Kaiser Family Foundation. He described the market as already "fragile" in his live-tweet analysis of the Republican plan Monday night.
- Exchanges will stay, for now. The exchanges for individuals who can't get insurance through their jobs or aren't poor enough for Medicaid have faced challenges, and insurers have threatened to leave exchanges many times in the past year because of all the uncertainty. "The question is whether the House bill stabilizes these markets or makes them worse," Levitt says.
- Medicaid stays the same-ish until 2020. In the 32 states plus D.C. that expanded Medicaid under the Affordable Care Act, people who are eligible can continue to enroll until Jan. 1, 2020, under the Republican bill, if it becomes law. But that bill proposes to eventually switch Medicaid from being open-ended coverage to a per person allotment for new enrollees.
- The requirement to buy insurance is gone. The House GOP draft eliminates the requirement that everyone buy health insurance or pay a tax penalty, aka the hated "mandate." It's a key mechanism the current health law uses to control costs by recruiting a larger pool of younger, healthier people.
- It's only the first round. This draft is only the first shot from the new GOP-controlled Congress. The next crucial moment will come when the nonpartisan Congressional Budget Office "scores" the plan, showing how much it will cost taxpayers. Also missing are critical numbers that will show how much insurance policies might cost and how many people might be covered. And it not only has to pass at least two House committees and get a full House vote but also must pass the Senate, where Republicans hold only a slim majority. If it wins there, the bill would go to the president for his signature.
As my colleague Alison Kodjak pointed out in her post Monday night, "it's far from clear that Republicans in the House are unified in their support of the bill. Members of the far-right Freedom Caucus have said they oppose giving tax credits to people who don't pay any federal income tax."
For their part, Democrats are denouncing the proposal. Reps. Frank Pallone of New Jersey and Richard Neal of Massachusetts say it "would rip health care away from millions of Americans, ration care for working families and seniors, and put insurance companies back in charge of health care decisions — contrary to everything President Trump has said he would do with his health care plan."