Becker's Hospital Review

40 40 CEO/STRATEGY The American Health Care Act: 8 Things to Know By Kelly Gooch and Molly Gamble A er years of lobbying to repeal and replace the ACA, House Republicans put forth e American Health Care Act on March 6. Here are eight things to know about the legislation. 1. The AHCA would eliminate the ACA's individual man- date, or requirement for American adults to enroll in health insurance. Further, the legislation eliminates the tax penalty adults faced if they were not covered. However, the concept of penal- ties still remains in some form; To encourage people to buy coverage, the AHCA lets insurers charge a 30 percent penalty for those who let their health plans lapse and try to buy a new policy, according to NPR. 2. The AHCA calls for Medicaid expansion to remain in ef- fect through Jan. 1, 2020. is is different from earlier dras of legislation, which called for an immediate reversal of Medicaid expan- sion. irty-one states, plus Washington, D.C., have opted to expand Medicaid under the ACA. By 2020, the government will "freeze" the expanded programs and restrict funding only to people who were in the program as of then — no added enrollees from that date on. States would keep getting that amount of federal aid for each Medicaid en- rollee as long as the enrollee doesn't lose eligibility for more than a month. ere is also a provision in the AHCA that calls for grants of extra Medicaid provider reimbursement funds to go toward states that didn't expand Medicaid. 3. The AHCA restructures Medicaid's federal funding to a per-capita cap opposed to the current open-ended feder- al entitlement, reports Politico. States would receive capped pay- ments based on how many people are enrolled in Medicaid. e plan also calls for more frequent eligibility testing of Medicaid enrollees. 4. The AHCA restructures Americans' tax credits to buy health insurance. It replaces income-based subsidies under the ACA with refundable, age-based and income-capped tax credits, according to Politico. ese credits increase with age, from as low as $2,000 for those under 30 or as high as $4,000 for those over 60. ere would be a limit as far as credits for a single household — $14,000 — and subsidies would be eliminated over time for individuals with annual income of $75,000 and for families with annual income of $150,000, according to the report. 5. A few ACA staples roll over in the AHCA. e ACA pro- vision related to pre-existing conditions would remain intact, mean- ing insurers would not be able to deny coverage or increase prices for people with such conditions, reports Reuters. Also, the AHCA retains provisions allowing adults up to age 26 to maintain coverage through their parents' health plans, according to the report. 6. The AHCA eliminates the cap on the tax exemption for employer-sponsored insurance. Although earlier dras of legisla- tion capped the exemption at 90 percent of current premiums, the final version eliminated the proposal, according to Politico. e bill also gets rid of the penalty for businesses that do not offer employees health coverage. 7. The AHCA delays the effective date for the ACA's Cadil- lac Tax on costly health plans from 2020 to 2025, according to e Hill. GOP lawmakers are delaying but keeping the tax to make certain their replacement plan will not increase the national deficit aer a decade. 8. The AHCA bars federal Medicaid funds or federal fami- ly planning grants for Planned Parenthood clinics, accord- ing to the report. (Separate from the AHCA, the White House on March 6 extended terms for a compromise to Planned Parenthood by proposing maintained federal funding if the group agrees to discon- tinue providing abortions, according to ABC News.) n CBO Scores the AHCA: 5 Things to Know By Emily Rappleye T he Republican-proposed American Health Care Act would reduce the federal deficit, but leave millions more Americans uninsured over the next decade, ac- cording to the much-anticipated estimate from the Congres- sional Budget Office and the Joint Committee on Taxation. The CBO-JCT estimate uses March 2016 as a baseline, with some adjustments for legislation passed since then. It as- sumes the AHCA would be enacted by May 2017. Here are the main estimated effects of the legislation, ac- cording to the CBO and JCT. 1. The AHCA would reduce the federal deficit by roughly $337 billion over the next decade. Several provisions of the legislation — namely Medicaid and individual subsidy re- ductions — would reduce the federal deficit by $935 billion from 2017 to 2026, according to the report. These savings would be partially offset by other provisions that increase the federal deficit by a total of $599 billion — primarily the new tax credits and revenue reductions linked to eliminating the individual mandate and taxes. All together, the CBO and JCT estimate the legislation would shrink the deficit by 2026. 2. The CBO and JCT estimate 24 million fewer Americans would be insured by 2026. By next year, 14 million more people would be uninsured, according to the report. This ini- tial drop in coverage is primarily attributed to repealing the individual mandate, indicating many would go uninsured by choice. The number of uninsured is expected to increase to 21 million by 2020 and to 24 million by 2026 due mostly to Medicaid changes, according to the report. A smaller factor in the drop in coverage is an expected drop in employer-based coverage. As part of its overall estimate of uninsured Americans, the CBO projected about 7 million fewer people would enroll in employer-based coverage by 2026. This estimate is based on the assumption that the elim- ination of the mandate penalties and the broader tax-credit offerings would make nongroup coverage more attractive.

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