The Proposed Death of Obamacare
By: Kaitwan Jackson
Before you read, key terms to know when understanding healthcare:
- ObamaCare = Affordable Care Act (ACA)
- Trump's plan: American Health Care Act (AHCA)
- Preexisting condition: a health condition someone had before their healthcare benefits went into effect. These conditions commonly lead to people being denied coverage. Under the AHCA, some preexisting conditions are: AIDS, rape, and cancer.
- Subsidy: amount of money granted by the government
In an effort to amend the Affordable Care Act/Obamacare (ACA), the Trump administration has created the American Health Care Act (HR 1628) (AHCA). The bill which was first introduced to the House in March, has been amended and passed along to the Senate. If the new healthcare bill passes in Senate it will without a doubt be approved by the President, and will cause about 23 million Americans to be uninsured by 2026.
Under the new program there will be a proposed cut of $834 million-dollars to federal Medicaid spending. ACA allowed state and federal government to share the cost of Medicaid spending, based upon state’s necessity. Under the AHCA, the government will utilize grant funding consisting of the states receiving a base amount for usage toward Medicaid programs. This base amount may be increased due to inflation, and on some occasions due to increased need. Unlike the ACA, the AHCA plans to halt all spending toward expanding Medicaid in 2020. This drastic decrease in spending for Medicaid will change laws establishing who is qualified to receive benefits. The bill also gives states the ability to put “able-bodied” Medicaid recipients to work, or they face a loss of coverage. Those exempt from this loss of coverage are pregnant women, children under 19, those with disabilities, and parents with disabled children.
With the new program, there will be a reduction in coverage costs after 2020, but this reduction arises due to insurance plans utilizing a cafeteria plan. Rather than simply receiving complete coverage, those seeking insurance will have the ability to pick and choose what best fits their needs. To save money this is great, but out of pocket costs will skyrocket if you have not purchased coverage for future medical concerns.
Under the AHCA there will be an increased emphasis on limiting the number of subsidies available to low-income individuals and families. Under the bill those making less that $30,000/yr. would see a reduction in government spending to help them pay deductibles and co-pays. The bill does allocate about $422 million-dollars to health centers that primarily provide services to lower-income residents. But with the projection of so many being uninsured the funding allocated to these centers will diminish quickly, once again leaving the neediest without options at health preservation. Health care centers providing abortion services will lose federal funding, solidifying the Republican’s agenda to eliminate federal spending that goes into Planned Parenthood.
With the AHCA subsidies will be correlated with a person’s age, not financial status. Therefore, there has been an elimination of support for lower income citizens. Loss of subsidies will significantly afflict those over the age of 26 who no longer qualify for parent’s coverage (under the ACA children can stay on their parent’s health plan until 26, an aspect carried into the AHCA), but have yet to gain the resources toward gathering medical care. If these young adults are employees of a business with at least 50 workers there is a strong possibility their employer will not offer them an insurance plan. A major change from the ACA, which federally stated that businesses with at least 50 employees need to provide comprehensive health benefits for their employees.
The new bill, however, retains the belief that insurers cannot deny coverage based on pre-existing medical conditions, but it induces a 30% charge on premium rates for those who have a lapse in coverage for 2 months or more, upon applying for a new plan. Insurers also can seek government waivers to prevent covering necessary needs of someone with a preexisting condition. Unlike the ACA which disallowed raising rates for those with already acquired conditions, the AHCA gives states the ability to fluctuate costs at their own discretion, meaning those already sick can be faced with absurd premiums that eliminate their ability to seek coverage.
The ACA increased taxes for those with incomes of $250,000 and above. The taxes collected from these citizens has helped to create subsidies that allow insurers to lower costs. Under the AHCA plan these taxes on the wealthy will be eliminated, but there has yet to be an announcement on how this revenue will be alternatively allocated.
In the coming weeks, the Senate will hopefully release a decision as to what will happen with the American Health Care Act. Much like the House, the Senate may revise the bill due to its possibility of eliminating progress toward ensuring the health of all Americans. There has yet to be an announcement as to how those uninsured will receive benefits under the AHCA; should it be passed. As the Senate meets to address the future of the bill it is possible the bill may receive a more liberal agenda, or skew completely conservative.