From the Desk of Bob McNett…….
House Passes American Healthcare Act……Now will pass to Senate.
On a second attempt, and by a narrow margin, the House of Representatives passed the American Healthcare Act (AHA,) their effort to “repeal and replace” the Obama administration’s Affordable Care Act (ACA.)
While this is a major legislative success coming within weeks of a similar bill failing to find enough support amongst Republican House members for passage, it will now pass to the Senate where it will likely be picked apart, sliced and diced, and put back together again to suit that body’s preferences. Then, a committee of House members and Senators will form a joint commission, assuming it gets that far, to hash out a final, compromise bill.
This initial version of the bill does away with several major parts of the Obamacare law, yet retains some of the structure of the ACA.
The bill would do away with two major tax penalties: The tax penalty on individuals that choose to not buy insurance, and the financial penalties on large employers that do not offer adequate coverage to their employees. However, if an individual goes uninsured for at least 63 days, the premium increases by 30% if he or she ever applies for coverage.
“Age-banding” would be loosened, allowing insurers to charge more for older adults and less for younger. Under current Obamacare rules, there can be no more than a 3 to 1 ratio between the highest to lowest premiums based on age.
However, a similar subsidy system will be retained to help people pay premiums. The new system’s subsidies will be based more on age with some income restrictions added in.
Also, it looks like allowances will be made for the continued existence of “exchanges”, the electronic, government-sponsored marketplaces where shoppers can buy individual insurance products available in their local areas.
At this point, a major point of contention looks to be how pre-existing conditions will be treated. There is language in the bill that seems to allow states that establish a high-risk pool to apply for waivers that would allow them to forgo coverage of pre-existing conditions. Many states had established high-risk pools to deal with this problem before the ACA was passed, but they all since have been dismantled because, under the ACA, insurers could not discriminate against individuals with health conditions. However, most of these pools became, over time, underfunded or had premiums so high that they became impracticable. The bill sets aside $8 billion to help fund these pools. Some are already pointing out that this amount of money would be inadequate to cover people with expensive, serious health conditions.
Adult children can still stay on parents’ coverage until age 26 under the new bill.
Now the “sausage-making” begins as the Senate and the House try to come up with a recipe for a bill that is palatable enough to become law. Stay tuned!
Robert K. McNett, LUTCF
The McNett Agency
918 294 3712 Fax 918 494 6725
Toll Free 1 866 497 7119