Where the AHCA Stands Today

Though the proposed American Health Care Act (AHCA) to repeal and replace the Affordable Care Act has passed through three key committees, we await full House and Senate review of the AHCA). The new law will change insurance for just about everyone; the way depends on whether Americans opt for company insurance, use Medicaid, or buy a private plan.

Specific plan details, costs and timing are still moving through the review process.  Naturally consumers are concerned about their health coverage options.  Below are the latest updates on what the plan looks like now:

Insurance from Your Employer

For Americans who get health insurance from their ‘small company’ employers, the AHCA would remove the penalty imposed by the existing ACA on companies with 50+ that don’t offer insurance to their employees.  Aside from the penalties assessed, some employers said it helped previously uninsured Americans get health insurance.  
Companies with 200+ employees—offering insurance to workers—would likely continue to offer insurance, even without the penalty, since it helps them retain and attract workers.
But in an effort to save money, some companies with 50—200 employees might stop offering health insurance.   This could create concerns for employees who work in companies of that size.

Eventually, the new AHCA may affect people who stay with their existing insurance plan, e.g. it will keep the so-called Cadillac tax on employers that offer generous healthcare coverage, although not effective until 2025, employers may offer less comprehensive coverage or plans and roll the costs to the employee.

Purchase Your Own Insurance

The existing ACA requires that employees get insurance from their employer, a government program, or buy their own insurance—or pay a penalty.  The new AHCA plan has no penalty; if you don’t want to buy insurance you don’t have to.  Specifics state:

  • This plan affords individuals more choices. A consideration, however, is if too many young, healthy people opt out, the rates will rise for everyone else. The solution would be for people to keep their coverage for a one-year higher rate if they drop their policy.
  • For those who self-insure, the AHCA plan changes how people can get help in paying for premiums. The ACA plan offers tax credits to subsidize premiums based on your income and where you live; lower income gives bigger credit.  Since healthcare costs vary by states, the ACA also offered more financial help to people who live in states where insurance cost more.
  • The AHCA format is based on age; it gives larger credits ($4,000) to people 60 and older, and smaller credits ($2,000) to those 30 and under. In addition insurers to could charge 60+ people up to five times more than younger ones (vs. three times more with the ACA).

Under the AHCA plan, if you’re young and healthy and live in places where healthcare is relatively inexpensive, insurance could be less expensive for you than under the ACA; the tax credits could cover premiums.  But if you’re older, poor, or live in an area where healthcare is more expensive, the cost of insurance may be less affordable.  Experts don’t know for sure whether there will be more losers than winners in the AHCA plan.

Medicaid Coverage

Medicaid recipients will see changes. Currently all ACA plans, including Medicaid, cover 10 "essential" health services, including: maternity coverage, prescription drugs, and mental healthcare. Those receiving health insurance through the Medicaid expansion program now will be grandfathered in and still receive it. However, starting in 2020, if your coverage has a break for more than one month you won’t be able to re-enroll.

Currently states finance Medicaid programs, and the federal government guarantees matching a percentage of a state’s Medicaid spending, regardless of the cost. The AHCA bill caps the federal funding that states can receive per Medicaid enrollee.  This would require states to reduce coverage or fund the extra expense. The new AHCA bill helps some people, but is of concern for those dependent on Medicaid.

Medicare Coverage

Medicare is separate from the ACA insurance marketplaces; the AHCA plan won’t cause Medicare premiums or co-pays to change.

For those reaching eligibility age for Medicare, the new AHCA proposal eliminates virtually all taxes used to fund the ACA starting in 2018, including a 0.9 percent payroll tax on higher-income workers that pays money into Medicare.  Loss of these funds could cause Medicare could be insolvent in 2024 and have to start reducing the amount of benefits it pays out—four years sooner than previously predicted.

Watch this blog for continued updates on the AHCA. 
American Health Care Act.  Click for USA.gov site.
For official updates on the AHCA download PDF Extension-Transitional-Policy-CY2018.
HHS.gov
TelePayroll – 800-442-4988 – www.telepayroll.com