Saturday October 21, 2017
House Sends American Health Care Act to Senate
The House bill is complex and comprehensive. It has ten major sections.
1. Health Care Credits – The former health care subsidies are replaced with credits used to purchase health insurance. Generally, the credits are $2,000 for persons in their 20's and increase to $4,000 for those in their 60's. There are phaseouts of credits for persons with incomes over $150,000. The new credits start in 2020.
2. Senior Credits – The bill added $85 billion for increased credits for more senior persons.
3. Employer Mandate – AHCA repeals the requirements for employers with 50 or more employees to provide a group health insurance plan.
4. Continuous Coverage – If individuals have a gap in coverage (perhaps 63 days or longer), an insurance company may charge a higher premium for a period of time.
5. State Waivers – Most plans must cover ten essential health benefits. States may seek waivers that permit the sale of major medical plans with different coverage levels.
6. High Risk Pools – ACHA sets aside $100 billion for states to create high risk insurance pools for those persons with serious illnesses.
7. Cadillac Tax Delay – The 40% excise tax on expensive employer health insurance plans is delayed until 2026.
8. Medicaid Funding – There is a new per capita grant for state funding of Medicaid. The states will receive block grants and can tailor their plans separately from the federal government. However, states will continue to receive support for elderly or disabled Medicaid recipients using an enrollment method.
9. Health Savings Account – AHCA increases the limits for HSA plans, starting in 2018. The plans may have increased limits of $6,550 for individuals and $13,100 for families. There also are increases in the permitted levels of funding for flexible savings accounts.
10. Taxes Repealed – The 3.8% Medicare tax on investment income is repealed in 2017. The 0.9% Medicare tax on incomes over $200,000 for single persons and $250,000 for married couples is repealed in 2023.
Editor's Note: Health care is a complicated and sensitive topic. This objective description of the basic provisions of AHCA is offered as an educational service for our readers. If and when a Senate health care bill passes, we will offer a similar objective description of that legislation.