Update on “Repeal and Replace of the Affordable Care Act”

Update on “Repeal and Replace of the Affordable Care Act”

Mar 27, 2017

“Obamacare” has brought health insurance coverage to about 20 million previously uninsured Americans. About half those people gained coverage through an expansion of the Medicaid program for the poor.

There are actually 3 phases currently being debated; what’s to be repealed, what’s to remain and what the replacement provisions will be. (FYI: The cost of the proposed bill, dubbed The American Health Care Act, is still uncertain) I hesitated to give an update before the final “Yes” vote needed from 51 members of the Senate in order for these changes to pass, but this is the question I get asked about daily, so as of 5:30 a.m. March 7th, this is where things stand.

Currently, this is what stands to be Repealed:

  1. The legislation would abolish the current income-based subsidies for purchasing insurance under Obamacare. (In a 3 year phase out, starting with the highest income individuals)
  2. Gone is the mandate for individual and employer coverage, along with that the penalties for not having health insurance coverage.
  3. In 2020, Medicaid expansion would be frozen and new people would be barred from enrolling under the income-based system.
  4. The measure would strip funding for Planned Parenthood for one year.

Currently, this is what stands to Remain:

  1. Insurers would still be prohibited from denying coverage or charging more to those with pre-existing conditions.
  2. Adults up to age 26 are allowed to remain on their parents' health plans.

Currently, this stands to be offered as a Replacement:

  1. $100 billion would be budgeted to create programs for patient populations, possibly including high-risk pools to provide insurance to the sickest patients.
  2. Tax credits that could be obtained in advance for people to buy insurance based on age. Proposed tax credits would range from $2,000 to $4,000 (For example, 20-year-olds could get tax credits worth $2,000, and the credits would grow the older a consumer gets. A 60-year-old could get a $4,000 tax credit)
  3. The bill would expand the incentive to use so-called health savings accounts by doubling the allowed contribution to more than $6,000 per person and $13,000 for a family.
  4. The new way to provide coverage to those on Medicaid (Called Medi-Cal here) would allow states to implement eligibility based on population, essentially putting capping the number of people who could enroll in the government program for low-income people.

These changes have four Committees to get through before heading for a vote in the Senate, projected to be around Mid-April. Stayed tuned next issue for an update.

Stephanie Frisch

Stephanie Frisch is the owner of Insurance 101 and is an independent insurance broker dedicated to helping others make “educated decisions” about their insurance choices when it comes to Medicare, Long-Term Care Planning, The Health Insurance Marketplace-Covered California and Life Insurance. For answers to your questions, or an in-home, no-fee consultation, call (949) 351-2443.