The Proposed American Health Care Act of 2017 (AHCA)
By: Robert Pusateri, Capstone Brokerage Benefits Consultant, May 9, 2017
The American Health Care Act of 2017 (AHCA), H.R. 1628, is the House Republicans’ leading proposal to “repeal and replace” the Affordable Care Act (aka Obamacare, abbreviated as the ACA).
House Republicans have released their replacement plan for the Affordable Care Act on March 6, 2017. Americans are asking how does the new H.R. 1628- American Health Care Act of 2017 (AHCA) / GOP Plan differ from the current law of the Affordable Care Act? The AHCA / GOP Plan has passed the House vote on 5/4/17 and is on the way to the Senate.
Let’s take a look at some of the major provision changes.
• For all months after Dec. 31, 2015, the AHCA bill eliminates the tax penalties that the ACA imposes on eligible or non-exempt individuals for not having health insurance, as well as Applicable Large Employers with 50 or more full-time equivalent workers who do not offer health insurance to their employees. (Presently those filing their 2016 tax returns will still be subject to the penalty.)
• Insurance companies also will still be required to offer medical coverage regardless of any pre-existing health condition. Under both options the ACA and the AHCA bill, insurers can’t deny coverage to anyone based on their health status. Under the AHCA bill, they can, however, charge 30% higher premiums for one year, regardless of health status, to those entering the individual market who didn’t have continuous coverage., which is defined as a lapse of coverage of 63 days or more over the previous 12 months.
• The AHCA / GOP Bill will keep the essential health benefits requirement under the ACA. Insurance companies would still have to cover 10 health services, including maternity coverage, prescription drugs and mental health care at no charge to the subscriber.
• Presently there are two forms of financial assistance related to medical premiums under the ACA: premium tax credits and cost sharing to lower out-of-pocket costs. Under the new AHCA / GOP Plan the premium tax credits would skew and the lower out of pocket costs sharing would be repealed or eliminated. The tax credits under the new AHCA / GOP Bill plan would be different than the sliding scale under the ACA. The new tax credits would be based on age, with older Americans getting more credits.
• As for the cost-sharing subsidies available now under the ACA, which can lower out-of-pocket costs for copays and other expenses for those earning between 100% and 250% of the federal poverty level, would be eliminated in 2020. However, the GOP bill sets up a Patient and State Stability Fund, with $100 billion in funding over nine years with state matching requirements, that can be used for various purposes, including lowering out-of-pocket costs of a state’s residents.
• Small-business tax credits would end in 2020. The health insurance marketplaces will stay, but the tax credits can be used for plans sold outside of those marketplaces as well.
Our next blog will also look at some other major changes including how the new AHCA affects you depends on your income, how you get your health insurance, and what kind of health care you need for yourself and your family. For more information about how this can/will effect your current benefits program reach out to a knowledgeable broker for an in depth analysis of your business’s package.
