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May 2017  Volume 10, Number 5        
 

long term care

What Republican Changes to the Affordable Care Act Mean to You

Many Republicans believe that, even though the new plan is more oriented to the free market, it doesn’t go far enough to fix the ACA’s problems. While Democrats are concerned that millions of Americans will lose access to healthcare coverage.

The ACA was implemented in 2010 to increase access to healthcare coverage for all Americans. Key provisions included:

  • Implementing market reforms
  • Establishing health insurance marketplaces
  • Expanding Medicaid eligibility for low-income adults

To meet those goals, the federal government mandated that:

  • All individuals must purchase insurance or pay a fine
  • Insurers offering health coverage must include 10 essential benefits
  • Large employers must provide health insurance to full-time workers

According to the Department of Health and Human Services, 20 million people were newly insured as a result of the ACA. The law, however, has many detractors. Opponents are concerned that the law could cost the government $1.34 trillion over the next decade, adding to a national debt that already is more than $19.8 trillion.

Health coverage costs also have risen on the marketplace, because of ACA rules and regulations and rising healthcare and prescription drug costs, making coverage too expensive for many individuals.

In March 2017, the Congressional Budget Office reviewed the Republican’s plan and said it would cut $37 billion from the federal budget deficit, but would increase the number of people without health insurance by 24 million by 2026.

While the future of the ACA currently is uncertain, to get a glimpse of the future of U.S. healthcare coverage, let’s look at the differences between the current plan and the Republican’s initial proposal:

Pros and Cons

Experts differ on whether repeal would be a good or bad thing. Here are some predictions on what could happen to some of the key points of the Affordable Care Act:

  • Individual mandate – The Republican plan eliminates the mandate that all Americans must have coverage or pay a tax penalty. However, it lets insurers increase premiums by as much as 30 percent for people who allow their coverage to lapse. A new system of tax credits is being proposed to entice people to buy coverage on the open market.
  • Medicaid – The Republican plan replaces the open-ended entitlement to healthcare with per-person funding limits.
  • Subsidies – The ACA provides income-based subsidies for low income individuals who purchase coverage on the marketplace. The Republican plan offers credits that would increase with age because older people generally require more healthcare. The plan reduces tax credits for individuals who have annual incomes more than $75,000 and for married couples with incomes more than $150,000. It also sets aside special funds to help states set up high-risk pools; fix their insurance markets; or help low-income patients.
  • 10 essential benefits – The ACA requires insurers to offer plans that feature, at a minimum, 10 essential benefits the government deems necessary. As a way to keep premiums low, the Republican plan allows insurers to sell less expensive plans that offer only the benefits the individual wants.
  • Pre-existing conditions – There would be no changes. Insurers would still have to offer coverage to all individuals, even those who had a serious illness before applying for coverage.
  • ACA taxes – Many taxes would be eliminated, reduced or delayed. For instance, the Cadillac Tax, which penalizes high-end benefit plans, would not take effect until 2025.
  • Age 26 – There would be no changes. Young people up to age 26 can remain on their parents’ healthcare coverage.
  • HSAs – A Health Savings Account allows individuals who have high deductible health benefit plans to save money for healthcare expenses tax free. The Republican plan increases the contribution limit.
  • Age band ratios – Insurers are only able to charge older adults three times what they charge a younger person. The Republican plan changes that to a 5-to-1 ratio, which puts less of a financial burden on younger people and would be more proportionate to the risk..

We’ll always try to keep you informed on the latest healthcare legislation developments.

 

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In this issue:

This Just In...

What Republican Changes to the Affordable Care Act Mean to You

How Long-Term Care Insurance Can Help You Avoid a Nursing Home Stay

How Likely Is Prescription Drug Price Reform?

How to Make Dental Coverage More Accessible to Older Americans

 


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