The House of Representatives voted Thursday to pass the American Health Care Act, the GOP plan to repeal and replace Obamacare.
The first version of the AHCA was released in early March. But it has since undergone significant changes that could affect people with preexisting conditions as well as the millions with employer-based insurance.
The changes have seemingly brought together a large enough coalition of conservative and moderate holdouts from the original AHCA to push the bill over the finish line in the House.
While the Congressional Budget Office has not issued an analysis of the bill with the changes, healthy-policy experts have attempted to analyze some of its potential effects.
Here’s what’s different this time:
- Invisible high-risk pools: These pools would operate similarly to the reinsurance policies established by Obamacare – officially the Affordable Care Act – which gave money to insurers to help lower premiums for the sickest people. In theory, this would help stabilize the individual insurance market for people without coverage through an employer or government program like Medicare. The bill would allocate $15 billion for the program over nine years, less than the $20 billion the Affordable Care Act did for a similar program. The MacArthur amendment: Introduced by centrist Rep. Tom MacArthur, the amendment would allow states to apply for waivers from the federal government to rescind some Obamacare regulations if they can prove it would reduce the costs for residents. States could lower costs through things like high-risk pools or larger reinsurance programs. The amendment, which was seen as a step toward a fuller repeal of Obamacare, was enough to win over the conservative House Freedom Caucus and flip as many as 20 votes to support the AHCA. The removal one of the two regulations, community ratings, could result in some people with preexisting conditions being charged more for insurance and priced out of the market, experts say. That possibility drove some moderates away from the AHCA, leaving the bill seemingly short of the needed votes to pass it. There are concerns, however, that the waivers could have other unintended effects, such as gutting protections for employer-based coverage and ending funding for special-education programs at schools. The Upton amendment: Introduced by Rep. Fred Upton, the amendment would allocate an additional $8 billion over five years to states that receive waivers for additional funding for their programs. While Upton said it was designed to help bring down costs for people with preexisting conditions, the amendment does not specify that the money must be used for them. Instead, it says the funds are to be used to “reduce premiums or other out-of-pocket costs of individuals who are subject to an increase in the monthly premium rate for health insurance coverage as a result of such waiver.” Many health-policy analysts agree that the funding proposed by the amendment, in addition to the funds allocated in the original AHCA, likely wouldn’t be enough to run a sustainable high-risk pool for Americans with preexisting conditions. Reps. Billy Long, Steve Knight, David Valadao, and Jeff Denham cosponsored the amendment. With those additions, it appears the GOP has a more comfortable path to passing the bill.
Here’s a reminder of some of the key provisions of the AHCA:
- Allow people with preexisting conditions to access coverage, but penalize lapses in coverage. Under the new law, insurers still could not deny coverage based on a preexisting condition, but anyone who did not have coverage for 63 days or more in the previous year would be subject to a 30% increase in premiums as a penalty. The idea is to discourage people from waiting until they are sick to access coverage. Introduce block tax credits for people to access health insurance. Instead of the ACA’s tax credits, which adjusted the amount based on a person’s income and residence, the AHCA would give lump tax credits to Americans based on age. A person making over $75,000 or a household making over $150,000 a year would see a decrease in the credit depending on the amount made over that. Here’s how much each age group would get:
- Under 30: $2,000 a year 30 to 39: $2,500 a year 40 to 49: $3,000 a year 50 to 59: $3,500 a year 60 and above: $4,000 a year
Provide grants to establish high-risk pools and encourage enrollment. The AHCA would include a fund for states to institute programs to stabilize the insurance market, most notably “the provision of financial assistance to high-risk individuals who do not have access to health insurance coverage offered through an employer.” This would allow states to establish high-risk pools for people with preexisting conditions. The plan would give states $15 billion in both 2018 and 2019 and $10 billion every year after that through 2026.