On Thursday, the US House of Representatives passed the American Healthcare Act, the Republicans' proposed legislation to repeal and replace Obamacare. The new and revamped bill increases premiums by thousands of dollars, promises to eliminate tax penalties for American citizens who don't have healthcare, reduce taxes on insurance companies and drug manufacturers, and gets rid of coverage to pre-existing conditions.
Here are some of the key features of the new bill:
Individual mandate: Under Obamacare, a key provision was Individual Mandate, which imposed taxes on people who don't sign up for healthcare. The Republicans had long pledged to eliminate this, and Trumpcare has done just that.
Further tax cuts: Richer citizens have a lot to gain from the new bill, as it eliminates two key taxes on high-income individuals. It also allows citizens to save more money through tax-excluded health savings accounts.
Breather of corporations: Another key provision of Obamacare was 'Employer Mandate', which said that companies that hired large number of employees, would have to offer affordable healthcare coverage to them. Under Trumpcare, however, companies won't face any penalties for failing to do this. Individual states can opt out of provisions of the bill, including one that requires insurers to provide basic health benefits like maternity care, emergency services like ambulances, etc.
Insurers can't charge higher premiums to sick people, unless the state already had in place an alternative mechanism to help provide coverage for people with serious illnesses.
One of Obamacare's most popular provisions, that insurers would have to offer plans to people regardless of their medical history, however, has been retained. Also, adult children can continue to stay on in their parents' plans until they are 26.
Benefits the rich
Because the bill gives tax cuts to the high-income individuals, and also to larger corporations, insurance companies and manufacturers of drugs and medical equipment, the biggest beneficiary of Trumpcare is richer people. The bill even does away with a provision meant to tax incomes of insurance executives that top $500,000.
This apart, people who wish to remain uninsured also stand to gain, with the elimination of Individual Mandate. As also do people who want a less comprehensive healthcare package. The bill allows insurers to offer health plans with higher deductibles, which is likely to lower premiums.
Moreover, citizens who live in states that waive benefit rules may also be able to buy plans not covering certain medical services like maternity coverage.
Mental health patients could benefit: States would also be given upto $138 billion, spread over 10 years, to be used for various purposes like subsidising premiums, providing coverage to people with pre-existing conditions, and paying for mental health care or prevention of drug addiction.
Poorer, older people lose big
While the bill will benefit the rich, a majority of older and poorer people, ironically the segment which voted in large numbers for President Donald Trump in last year's election, will be the big losers. Medicaid, a social healthcare programme for individuals with limited resources, would lose big. The programme would be expanded until 2019, but no newly eligible people can be added after that. However, as this Vox article points out, people on Medicaid often cycle in and out of the programme as their employment situation and incomes change, and that would lead to a drop in Medicaid coverage.
Moreover, the new bill also introduces an option of states turning the money into a "block grant", a lumpsum figure rather than a per-person payment for each Medicaid patient, which would cut the programme further. People with pre-existing conditions suffer. While the bill does make it mandatory for insurers to offer schemes to people regardless of their medical history, sicker people could be charged higher premiums as well.
People living in states that opt out of certain core Obamacare requirements, like emergency services, hospitalisation costs, maternity and childcare, lab services, etc.
The bill would prevent Planned Parenthood from receiving any federal money for one year, a major hit for a health care provider that relies substantially on payments from Medicaid and the Title X family planning grant to provide contraception, cancer screenings and other women's health services.
The bill would also seek to reduce access to abortions, by preventing federal subsidies from going to any health plan that covers abortions.
Published Date: May 05, 2017 11:38 AM | Updated Date: May 05, 2017 11:38 AM