TouchPoints: The Empyrean Blog

Update: Republicans Reveal Plan to Replace Obamacare

On Monday, House Republicans shared their plan to repeal and replace the Affordable Care Act (ACA). However, the long-awaited bill must tackle tough challenges and doubt on both sides of the aisle in order to become law.

The new bill, called the “American Health Care Act,” eliminates the individual mandate requiring most Americans to obtain health coverage. Instead, people who allow their coverage to lapse could see a different form of penalty, as carriers would be able to increase their premiums by as much as 30%.

Employers would no longer be required to offer coverage to full-time employees. In addition, the bill delays the ACA’s excise tax (also known as the “Cadillac Tax”) until 2025 – extending Congress’s previous delay by five additional years.

Three popular parts of the ACA will likely remain intact: children will be able to stay on their parents’ coverage until age 26, carriers will not be able to deny coverage due to a pre-existing condition, and the lifetime coverage cap ban will remain in effect.

The American Health Care Act includes plans to reduce Medicaid coverage that was expanded under the ACA and transition it to a per-capita program, revoke funding for Planned Parenthood, and eliminate income-based tax credits and taxes on high-earners. The bill would increase allowable HSA amounts to $6,550 for individuals and $13,100 for families. It also proposes set tax credits for individuals and families purchasing insurance.

Republicans have not released an estimated cost for the new plan, nor have they provided an estimate on how many Americans would lose or gain coverage. The plan would also eliminate subsidies enabling low-income participants to cover the cost of insurance bought on the ACA’s public exchanges, though experts have warned that such a move could have disastrous effects on the insurance market. Instead, the bill would provide states with a fund of over $100 billion to help stabilize their exchange markets, and assist lower-income participants with covering healthcare costs or accessing preventative care.

With support from President Trump, Republican representatives hope for the new legislation to swiftly gain approval from two committees before being presented to the entire House ahead of its spring break on April 7.

Passing the bill through the Senate will be a much more difficult challenge for Republicans to overcome, however, as they do not hold enough seats to pass the new legislation across party lines. Democrats have vowed to reject plans to replace the ACA, saying the healthcare law should be improved instead of scrapped. Meanwhile, even some Republicans have voiced doubts and concerns over the efficacy of this new bill. Still others have criticized the plan as “Obamacare-lite,” and continue to demand a full repeal of the current healthcare law, opposed to what they view as mere alterations.

For more on the American Health Care Act and Republicans’ ACA repeal plans, check out the following articles:

“House Republicans Unveil Plan to Replace Health Law.” The New York Times, March 6, 2017.

“Republican Health Bill Leaves Employer Tax Exclusion Untouched.” Employee Benefits News, March 8, 2017.

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