President Trump’s Actual Health Care Amendment
You’ve probably read the headlines: “The New Study That Shows Trumpcare’s Damage,” The New York Times, “GOP Health Plan: Don’t Get Sick (Especially If You Live in a Red State)”, The Huffington Post.
Frightening, and perhaps even borderline unethical, many of these articles are written with a clearly biased tone against President Trump and the GOP’s valiant effort to create a sustainable health care plan for all Americans.
But what’s the truth? Where do we stand now that the American Health Care Act has passed the House and is moving to the Senate? Are you really going to lose all your health care coverage and be left destitute like the Dem’s and the liberal media claim?
In short, no.
To clear the air, and hopefully explain what to expect from this amendment, we’re covering the most important points of the AHCA and how they will affect you as an individual and as a business owner.
It’s important to note that today the amendment was passed only in the House, and that the Senate is less likely to be as accommodating to GOP interests. Nevertheless, Americans deserve to be properly informed about this significant piece of legislation.
Pre-Existing Conditions Will be Covered
One of the biggest complaints and half-truth’s being spewed by the media is that under the AHCA pre-existing conditions will be gutted. Insurers can supposedly give you any lousy coverage they deem fit.
The AHCA has been reworked since the previous House failure, and new amendments were set in place to guarantee coverage for all Americans.
Fred Upton and Billy Long met with the president to agree to add $8 Billion over the cost of five years to help cover the costs of those with pre-existing conditions who otherwise would be priced out of insurance.
Instead of high-risk, low-income, individuals increase premiums for the entire pool, these individuals will be allocated to high-risk pools for coverage. Called the Upton Amendment, you can read the full story here.
Waivers are another feature of the amendment that holds out coverage for those with pre-existing coverage. States will be issued waivers enabling carriers in their state to set premiums based on medical backgrounds.
However, enrollees in these plans who experience an increase in their premiums will have access to high-risk pools that offset costs. States, therefore, wouldn’t be left footing the bill on their own. They would in fact get some help from the federal government.
High Risk Pools Could Lower Costs
There’s so much talk about how high-risk pools are bad for the sick and elderly. However, they’ve never been fully utilized in the American healthcare marketplace.
A revision to the AHCA provides greater coverage via the waivers we mentioned before. This allows states to rescind Obamacare requirements if they can provide explicit evidence that doing so would reduce costs to people in their state.
Called the MacArthur amendment, it creates an easy transition into high-risk pools and also opens up the way for larger reinsurance programs, all offered at lower costs than Obamacare.
Money from the government goes to insurers to help reduce premiums for the sickest in each pool. This in effect stabilizes the individual insurance market for individuals who do not have employer or government backed coverage, such as Medicare.
This MacArthur Amendment lowers costs for high-risk allocation from $20 billion, under Obamacare, to $15 billion through the AHCA. In reality, it saves both consumers and the government money.
Another area where the amendment provides cost reduction is through the community rating.
Previously, insurers were obligated to charge consumers the same price regardless of the average health, age, or gender in their specific area. This often resulted in high costs.
Under this new bill, however, states could get around the community rating in one of three ways:
- Provide funding for people with pre-existing conditions so they too can get coverage
- Participate in invisible high-risk pools
- Provide incentives to appropriate entities
These options are extremely appealing to employers who foot the bill for high insurance costs based on an arbitrary community rating.
The Individual Mandate and Employer Penalties Are No More!
Almost universally, Obama’s individual and employer mandates were rejected by consumers. No one likes to be penalized for not paying for a service they may or may not need.
Obamacare penalties effected millions of Americans, over 6.5 million in 2015 alone. Individuals who didn’t have coverage through the marketplace were forced to pay a penalty of up to $695 or 2.5 percent of their yearly income—whichever was greater. This mandate did little to nothing to encourage people to purchase healthcare. In fact, there was no change in employer coverage under Obamacare.
For employers, the penalties were far steeper. Even small businesses with as few as 50 employees were subjected to the tax penalty.
Now, however, that will change.
Employers will no longer be subjected to the mandate and no tax penalties will be applied for that alone. The Senate may adjust this once the bill makes it to them, however.
In lieu of that tax, there will be penalties for lapses in coverage. Insurers, under the AHCA, can now impose a 30% surcharge on accounts that have lapsed in coverage for more than 63 days. This surcharge can be maintained for a year, but would only be applicable to insurance bought in individual or small group markets. In other words, large group insurance wouldn’t be effected.
American’s Will See Lump Tax Credits for Insurance
Another feature of the AHCA, conveniently left out of most media coverage, is tax credits for insurance.
Under Obamacare, tax credits were based strictly on income and cost of coverage. President Trump’s health care reform bill provides better credits based on age and income instead.
The new income brackets would go something like this:
- People in their 20s will be given a $2,000 credit
- People in their 60s will be given a $4,000 credit
- Individuals who earn $75,000 would see tax credits start to wane
- Individuals earning more than $215,000 aren’t eligible.
- Families with incomes of $150,000 would see few credits
- Families earning more than $290,000 would not qualify for tax credits
Instead of tax credits that vary with each passing year, the AHCA would provide lump tax credits across the board.
American’s Will Have More Health Care Plan Options
Obamacare has dramatically cut providers and insurer options on the market.
In 2016, the most limited plan options to date were introduced to consumers through the healthcare marketplace, taking a dramatic 12 percent reduction in plan options.
Customizations are all but a thing of the past under the current healthcare plan. President Trump’s health care reform bill is set to change that.
Under the amendment, consumers can choose the healthcare that is right for their family’s needs. Whether that’s maternity care, vision, dental, or something more, the options will be available to Americans.
As a result of the flood of new plans into the marketplace, lowered premiums will be a natural result. More competition typically results in lowered premiums.
Maternity and Mental Health Care Are Included in the Amendment
Contrary to what the liberal media wants to tell you, the GOP’s new bill will in fact offer coverage for maternity and mental health care.
The bill will also add $15 billion to fund maternity, mental health and substance abuse services, until 2020, with an additional $15 billion to create invisible risk pools to help with high-cost policyholders.
Also, as of yesterday, lawmakers added another $8 billion over the course of five years to support those high-risk pools as we stated earlier. The money would go to states that seek waivers to opt out of two of Obamacare’s key insurance provisions.
In other words, coverage for these important, yet specialized, facets of health care remain a part of the bill but simply take on a different form.
How It Will Affect The Greater Houston Area
For many, one of the biggest concerns over Obamacare was the inability to pick and choose which hospital you’ll use for coverage.
Obamacare limited insurers because of extreme pressure to keep premiums low. This resulted in cuts to which provider’s individuals can utilize.
Larger networks hold out potential to lower costs and include coverage for a multitude of hospitals.
The AHCA takes aim at these limitations. The goal is to open up coverage across the board, and this could include coverage in previously nixed hospitals.
For example, the MD Anderson Cancer Center in Houston was eliminated from one consumer’s health care plan leaving her to foot the bill for her $10,000 a month experimental cancer treatments. The treatment single handily saved her life, but nonetheless has created more debt than she’d like to carry.
Under the AHCA, Houston’s largest cancer center could possibly be covered under new standard healthcare plans. Other hospitals like Methodist hospitals around the greater Texas areas could also be brought back under the standard policies.
While this is yet to be seen from the new health care reform, we can be certain that the drama surrounding how awful it will be is far from reality.
Pre-existing conditions will be covered. Lowered premiums are also likely to take effect. Tax credits will still be there. But what is the next step before it’s passed?
What’s Next for the AHCA?
Should the AHCA not get bi-partisan support, House Republicans won’t be able to completely repeal the ACA. Even with a Republican majority, the bill has an uphill battle to climb in the Senate.
Republican leadership in the Senate must first agree to amend the House bill, or add to it with a reconciliation bill. A simple majority (51 votes) would then be needed to pass the Senate, which means nearly all Republicans must be in agreement (there are 52 Republican senators).
As we move forward, you can be certain Healthcare Consultants, Inc., will stay on top of changes to the bill and provide complete coverage of amendments and how they will affect you. Stay tuned for the latest information.