House Unveils Its Answer to Obamacare: The American Health Care Act

Here's a rundown on the bill that would replace the Affordable Care Act.

 

The Affordable Care Act (ACA), often called Obamacare, has been in the crosshairs of Republicans since then-President Barack Obama signed it into law in 2010. On March 6, House Republicans unveiled the American Health Care Act (AHCA), their long-awaited 66-page bill to replace the ACA. While no Democrats are expected to vote for the bill or work with the GOP to get it passed, some of the fiercest opposition to the new plan is coming from the hardline right. Some of the GOP’s more conservative members have already called the bill “Obamacare Lite” and “Obamacare 2.0.”

Here is a look at the House’s proposed bill to amend the Obamacare, the changes that may be in store and what it could mean for your wallet.

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The American Health Care Act in a Nutshell

The GOP bill would immediately eliminate the controversial personal insurance “mandate,” which is a stiff tax penalty charged to those who go without coverage.

Instead, the AHCA provides tax credits for individuals making less than $75,000 a year and families making less than $150,000 to buy their own coverage. Since older people are more expensive to insure, those credits would increase with age. The credits could be used to purchase any state-approved plan.

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The bill also gets rid of cost-sharing measures, which were used to help lower-income Americans with their copayments and deductibles. Instead, the plan allows states to use federal funds to provide similar assistance.

The plan also dramatically expands health savings account contributions, which could help individuals pay for high deductibles or care that their plans don’t cover.

The bill will also get rid of reductions in federal aid to hospitals in states that did not expand Medicaid.

The AHCA allows insurers to charge older Americans five times what they charge younger policyholders, as opposed to Obamacare, which limited the increase to three times. Finally, the bill would forbid Americans from using tax credits to buy any plan that covers elective abortions.

ACHA vs. Obamacare: What Stays the Same?

Although the overhaul is comprehensive, the bill leaves some key elements of Obamacare in place.

Insurance companies will still not be able to discriminate or deny coverage based on pre-existing conditions, although it will now be the responsibility of the policyholder to retain insurance consistently without letting their coverage lapse. If policyholders fail to do so, they could be hit with a 30 percent penalty in addition to their premium payments.

Another key element of the ACA that the ACHA preserves is that young adults will still be permitted to remain on their parents’ plans until they turn 26.

Like Obamacare, the proposed House bill would continue to provide increased federal funding for expanded Medicaid through 2019. Beyond that, only those already covered by the expansion would be eligible for enhanced state financing.

Finally, the bill also retains — to the ire of hardline conservatives — the so-called “Cadillac tax,” which penalizes employers for buying into high-premium plans for their workers.

Repealing and replacing Obamacare has been a rallying cry for Republicans since the law was enacted. Today, the party holds the White House and retains a tight grip on both the House and Senate, and the party’s proposed legislation has finally arrived.

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