Obamacare replacement proposal
March 13, 2017
Last week, the White House released its new plan to repeal and replace Obamacare with Trumpcare. The bill will keep the more popular parts of Obamacare while modifying or completely changing other parts of it.
Similarly to Obamacare, the proposal allows children to be covered by their parents’ insurance until age 21 and confirms all insurers must offer 10 essential health benefits, which include maternity care and preventive services. In addition, it prevents the latter from putting limitations on how much they have to spend to cover someone under their policies. It also keeps the most renowned aspect of it, requiring insurers to cover people without discrimination due to previous health conditions, stopping companies from charging more to certain people based on their medical history.
Instead of letting plans charge only up to 3 times more for older people than younger ones, it allows them to charge up to 5 times more, giving individuals states the freedom to set their ratios. Under Obamacare, a person could put $3,400 and a family $6,750 into a tax-free health savings account, while under the new bill people will be able to put much more money. As a matter of fact, the limit will become at least $6,550 for an individual and $13,300 for a family. As for Medicaid, the new proposal will keep it until 2020 when it will get frozen and gradually rolled back. It will give time to the new administration to figure out exactly how it is going to alter the way the program is funded. The last thing the bill intends to modify includes how subsidies get distributed by using age instead of previously used income in order to calculate how much people receive. For example, tax credits would be available in full to individuals earning less than $75,000 and to households earning less than $150,000, but unavailable for people earning more than that.
Trumpcare plans to repeal the employer mandate that forces big companies to provide affordable insurance to their employees and the subsidies-out-of-pocket expenses, which meant that the federal government will no longer provide tax credit to help some people pay deductibles and copayments. Last but not least, the individual mandate that forces people who can afford it to have an insurance plan will be no more. In place of that, a continuous coverage rule states that anyone who goes without insurance for 63 days or more may be charged a 30% penalty on their next policy they get. That stops people from only buying insurance policies when they get sick, which would drive its prices up.