The American Health Care Act is a proposed piece of legislation introduced in early March by Republican leaders in the U.S. House of Representatives to repeal and replace former President Barack Obama’s Affordable Care Act.
The bill will be considered by the House’s Budget Committee on Thursday.
Here are 10 things to know about the proposed legislation.
1. If enacted, the legislation would reduce federal deficits by $337 billion between 2017-26, according to the Congressional Budget Office. The largest savings would come from reductions in spending for Medicaid and from the elimination of the ACA’s subsidies for nongroup health insurance, or individual coverage.
2. By 2018, 14 million additional people would be uninsured if the legislation passes compared to existing law. There are approximately 29 million uninsured Americans today. Most of the increase would be due to repealing the penalties associated with the ACA’s individual mandate, according to the CBO analysis. The increase in additional uninsured Americans is expected to rise to 21 million by 2020 if the legislation is signed into law.
3. The AHCA leaves in place several requirements related to women’s health care under existing law, such as requiring individual and group plans to cover contraception and cancer screenings and a requirement to cover maternity care as an essential health benefit. However, the AHCA would prohibit federal Medicaid funding for Planned Parenthood clinics for one year and would redefine qualified health care plans to exclude any plan covering abortion services beyond those for saving the life of the woman or in cases of rape or incest, according to the Kaiser Family Foundation.
4. In 2018 and 2019, average premiums in the nongroup, or individual, market would be 15 to 20 percent higher than under existing law because the individual mandate penalties would be eliminated. This is a similar projection to the current law, according to the CBO. However, beginning in 2020, the increase in those premiums would be offset by several factors; by 2026, average premiums for single policyholders would be roughly 10 percent lower than existing law, according to the CBO.
5. Beginning in 2020, ACA income-based tax credits would be replaced with a flat tax credit adjusted for age, according to the Kaiser Family Foundation. Credits would be payable monthly with the following credit amounts available annually:
-$2,000 per individual up to age 29
-$2,500 per individual ages 30-39
-$3,000 per individual ages 40-49
-$3,500 per individual ages 50-59
-$4,000 per individual age 60 and older
6. U.S. citizens and legal immigrants who are not incarcerated and not eligible for coverage through an employer plan, Medicare, Medicaid or TRICARE, which is a health care program for service members and their family, would be eligible for a tax credit. Eligibility for the tax credit would phase out starting at income levels above $75,000 for individuals and $150,000 for joint filers, according to the Kaiser Family Foundation.
7. The proposed legislation would repeal numerous ACA taxes beginning in 2018, including tax penalties associated with the individual and large employer mandate, a tax on tanning beds, a tax on health insurers, a chronic care tax, an excise tax on the sale of medical devices, an increase in Medicare payroll tax rate on wages for high-wage individuals and several others.
8. The AHCA would impose a late enrollment penalty for people who do not stay continuously covered. The penalty would be 30 percent of an otherwise applicable premium for individuals buying nongroup coverage who have not maintained continuous coverage. This differs from existing law under which individuals without coverage pay a tax penalty greater of $695 per year or 2.5 percent of household income.
9. The AHCA would eliminate the option to extend Medicaid coverage to adults above 133 percent of the federal poverty level effective in 2020 and would convert federal Medicaid financing to a per capita cap beginning in 2020. The new legislation would also terminate the enhanced federal matching rate for new enrollees under the ACA’s expansion of Medicaid, according to the CBO. Therefore, the CBO estimates Medicaid spending would be about 25 percent less by 2026 than what is projected today under current law.
10. The requirement to provide dependent coverage for children and young adults up to age 26 for all individual and group policies is not changed under the AHCA, according to the Kaiser Family Foundation.