The House of Representatives passed the American Health Care Act of 2017 on May 4, 2017. This new bill is the next attempt at repealing and replacing the Affordable Care Act, also known as Obamacare. The bill now moves on to the Senate where it is expected to face more opposition than it faced in the House. We took a look at the new bill to see what it means for the American people.
On May 4th, The House of Representatives passed the American Health Care Act of 2017 with a vote of 217 to 213. A House vote does not guarantee the bill becomes law; it must still pass the Senate, where it is expected to face much stronger opposition due to a smaller majority and greater concern expressed by many members of the majority Republican Party. This new bill is the result of compromise on the original proposal offered at the beginning of the year that failed to be put to a vote in congress due to lack of support from many Republicans including the conservative Freedom Caucus who did not see enough deviation from the ACA. (Read our explanation of the original proposal here)
Perhaps the most predominant change to the new bill is the removal of protections for individuals with pre-existing conditions. The change was a negotiation with the Freedom Caucus, possibly the most conservative group in the House of Representatives, in order to garner their votes. This amendment gives states the option to waive the ACA requirement that insurers do not charge higher premiums for consumers with pre-existing conditions. If a state should chose to opt-out of this requirement, however, they will need to provide an alternative mechanism for those with pre-existing conditions, who would have difficulty finding health care coverage, such as a “high-risk pool.”
High-risk pools are private, self-funded health insurance plans organized by states to serve high-risk individuals who meet enrollment criteria and do not have access to group insurance. Risk pool health insurance is more expensive than traditional individual insurance because pool members, by definition, are those who are considered to be medically uninsurable. State laws generally cap risk pool rates between 125-150 percent of the base individual market rate.
These high-risk pools likely covered just a fraction of the number of people with pre-existing conditions who lacked insurance, due in part to design features that limited enrollment. State pools typically excluded coverage of services associated with pre-existing conditions for a period of time and charged premiums substantially in excess of what a typical person would pay in the non-group market.
While this move did win over many Republicans who did not support the original proposal at the beginning of the year, the change also left some Representatives uncomfortable with the prospect of leaving vulnerable constituents without health care. To ensure support of these individuals was not lost, an additional amendment was created, which provides 8 billion dollars in federal funding over 5 years to go towards the mechanisms put into place to help those with pre-existing conditions find insurance.
According to Larry Levitt, Senior Vice President at the Kaiser Family Foundation, “Even with all the layers of funding in the bill and the subsequent amendments, the money falls short of what would really be necessary to cover the cost of people with pre-existing conditions,” and AARP warns that the amendment “would do little to mitigate the massive premium increase for some of the most vulnerable Americans”.
The new bill also changes how some individuals may qualify for tax credits. Unlike the ACA, which allocated credits based on income, the AHCA issues credits only based on age, meaning that older individuals would qualify for less tax relief than younger individuals, regardless of plan cost and how much the individual can afford to pay for their insurance. Kaiser Family Foundation has created an interactive map to show how different areas will be affected by the change. In addition, the AHCA increases how much more insurance companies can charge adults over 65. When compared to younger consumers, the AHCA raises the allowed difference in premium cost from three times as much, to five times as much. Additionally, the new bill eliminates the tax penalty put in place for failure to have insurance. It instead encourages continual coverage by allowing insurers to charge people a 30 percent penalty over their premium for one year after a lapse in coverage. Each of these changes were proposed in the initial bill.
The new bill also reduces Federal funding of the Medicaid Expansion program implemented under the ACA, which risks a decline in Medicaid for all Medicaid recipients, particularly those in nursing homes and people with disabilities.
Planned Parenthood services would also be affected under the new AHCA bill. Under the ACA, federal reimbursements were made available for most, though not all, Planned Parenthood Services. Under the House version of the current bill, federal reimbursements of Planned Parenthood Services will be blocked for 1 year.
Mental health services will be reduced in states that choose to opt out of the ACA requirement that every insurance plan provide 10 Essential Health Benefits. Under the ACA, all insurance plans were required to provide the 10 following benefits:
- Outpatient care—the kind you get without being admitted to a hospital
- Trips to the emergency room
- Treatment in the hospital for inpatient care
- Care before and after your baby is born
- Mental health and substance use disorder services: This includes behavioral health treatment, counseling, and psychotherapy
- Prescription drugs
- Services and devices to help recovery if you are injured, or have a disability or chronic condition. This includes physical and occupational therapy, speech-language pathology, psychiatric rehabilitation, and more
- Lab tests
- Preventive services including counseling, screenings, and vaccines to keep you healthy and care for managing a chronic disease
- Pediatric services: This includes dental care and vision care for kids
The AHCA also significantly changes the taxes for wealthy individuals that helped cover the cost of health care in the ACA bill. This new bill eliminates the taxes resulting in an estimated tax break to corporations and wealthy citizens totaling 592 billion dollars according to the Congressional Budget Office. The Tax Policy Center determined that the break would amount to an average tax cut of $0 for households in the bottom 90 percent — those making $208,500 or below. Members of the top 0.1 percent however, who on average make more than $3.75 million per household annually, would get an average tax cut of $165,090. In addition, the elimination of the Medicare surtax will give the top 0.1% a further break of $30,520 with the lower 90% again receiving no break.
The bill is expected to encounter stronger resistance in the Senate, where the Republican Party holds a smaller majority. It is expected that no Democrat will be in favor of the bill and it would take only 3 Republican “no” votes for it to fail in the Senate. The Senate does have the option to amend the bill and if it does so, the amended bill will need to return again to the House for a new vote.
Written by Melissa Sheffer for the Milwaukee Area Science Advocates (MASA)