The New American Health Care Act Phase One

March 07, 2017

Michael Grossman, President 

The Bank Of San Antonio Insurance Group 

FROM OBAMACARE TO TRUMPCARE

President Trump told Congress that he will “replace Obamacare with reforms that expand choice, increase access, lower costs, and at the same time provide better health care.’’ On Monday the House Republicans released their draft of the legislation to do so. Here are important points in the draft:

THE PENALTY IS OUT

The Individual Penalty for failing to have insurance is not part of the new law. However, it does allow insurers to add a 30% surcharge to new policies taken out by people who have allowed their previous health plans to lapse.

TAX CREDIT IS IN

The new plan allows $2,000 to $4,000 in refundable tax credits to help buy health insurance. The credit increases as the taxpayer ages and is also affected by the number of people in a family. Individuals making more than $75,000 and couples filing jointly and making more than $150,000 will not be eligible for the credit.

THREE IMPORTANT PROVISIONS STAY

Congress’s draft legislation preserves these benefits from the previous administration’s plan:

1. Insurers may not deny coverage due to pre-existing conditions

2. Unlimited Lifetime Coverage, i.e. there will be no maximum limit to coverage

3. Dependent children can be covered by their parents’ plan until age 26

MAJOR MEDICAID SHIFT

Congress is putting a stop to the expansion of Medicaid. Instead, states will be given a set budget to provide Medicaid to citizens who are disabled, elderly, low-income mothers, etc. Starting 1/1/2018, states will access a 10-year $100 billion fund to help lower-income people afford insurance and to help stabilize state insurance markets. This fund has broad provisions to allow the states to appropriate the funds as they see fit.

UNKNOWN: WHO GAINS, WHO LOSES

Estimates of the revenue impact and how many people will gain or lose insurance coverage are still forthcoming as the nonpartisan Congressional Budget Office hasn’t yet evaluated the bill. This will include more phases of implementation and additional changes. The Obamacare-to-Trumpcare “course correction” will take over two years to show definitive results.


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